Major players in the open banking market are Capital One, HSBC Bank plc, Banco Bilbao Vizcaya Argentaria S.A, NatWest Group plc, DBS Bank, Barclays, Lloyds Banking Group, Citigroup, Banco Santander S.A., Credit Agricole, NCR Corporation, DemystData, Figo GmbH, Finastra, Jack Henry & Associates Inc., and MineralTree Inc.
The main types of services in open banking are transactional services, communicative services, and information services.Trade finance and cash management services are provided by transaction banking to businesses, government agencies, and other financial organizations.
The different financial services include bank and capital markets, payments, digital currencies, value-added services and are deployed in various modes such as cloud, on-premises, hybrid. The various distribution channels include bank channels, app markets, distributors, and aggregators.
The global open banking market is expected to grow from $11.79 billion in 2020 to $15.13 billion in 2021 at a compound annual growth rate (CAGR) of 28.4%. The change in growth trend is mainly due to the companies stabilizing their output after catering to the demand that grew exponentially during the COVID-19 pandemic in 2020. The market is expected to reach $37.77 billion in 2025 at a CAGR of 25.7%.
The open banking market consists of sales of open banking services by entities (organizations, sole traders, and partnerships) that unites banks, third parties, and technology providers, allowing them to exchange data easily and securely for the benefit of their consumers.Open banking is a banking practice in which third-party financial service providers can use application programming interfaces (APIs) to gain access to consumer banking, transactions, and other data from banks and NBFCs.
These APIs deliver a secure way to share financial information between two parties and makes it easier for consumers to compare the details of current accounts and other banking services.
North America was the largest region in the open banking market in 2020.Asia Pacific is expected to be the fastest-growing region in the forecast period.
The regions covered in this report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, and Africa.
The surge in usage of online platforms for making payments is contributing to the growth of the open banking market.The digital payment system is rapidly expanding with developing payment methods, increased e-commerce use, improved broadband access, and the advent of new technologies.
Payment gateway APIs are used by online platforms such as phone pay, Paytm, and Google Pay to manage recurring billing, and these APIs are often used in open banking.For instance, in August 2021, Google Pay, a US-based digital wallet platform crossed 1 billion transactions.
Additionally, in July 2021, PhonePe, a digital payments network, set a new milestone by processing 1.5 billion transactions through the unified payments interface (UPI). Therefore, the rise in the use of online platforms for making payments is expected to propel the growth of the open banking market in the coming years.
Big data analytics is an emerging trend in the open banking market.Big data analytics collects, processes, and analyzes structured, and unstructured data.
The major use of big data analytics is to get business insights into the data.In the open banking market, big data analytics is used to personalize the services for improving the customer experience.
For instance, in 2020, HSBC Bank plc, a UK-based investment banking company increased its investment in the use of artificial intelligence (AI) and big data analytics techniques to manage financial crime risk.
In June 2021, Visa Inc., a US-based financial services company acquired Tink for $2.15 billion. The acquisition is expected to accelerate European open banking adoption by providing a secure and dependable platform for innovation. As a result, customers will have more control over their financial experiences, including financial objectives, managing their funds, and financial data. Tink is a Sweden-based open banking company that helps banks, fintech’s, and start-ups across Europe develop database financial services.
The countries covered in the open banking market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA.
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