Open Banking Market Overview
[217 Pages] Global Open Banking Market reached US$ 20.9 billion in 2022 and is expected to reach US$ 129.8 billion by 2030, growing with a CAGR of 25.7% during the forecast period 2023-2030. The Open Banking Market has been experiencing significant growth worldwide due to technological advancements, regulatory initiatives, and increasing customer demand for personalized financial services.
Furthermore, open banking initiatives are gaining traction worldwide, with various regions and countries embracing the concept.
Europe has been at the forefront of open banking, covering more than 44.4%, followed by regions like North America, Asia-Pacific, and Latin America, where open banking ecosystems are evolving.
European countries have embraced open banking, with many banks and financial institutions actively implementing open banking APIs and infrastructure. Countries such as the UK, Germany, and the Nordic countries hold nearly 2/3rd of the region and have been particularly proactive in fostering open banking ecosystems.
Open Banking Market Scope
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Metrics |
Details |
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CAGR |
25.7% |
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Size Available for Years |
2022-2031 |
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Forecast Period |
2022-2031 |
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Data Availability |
Value (US$) |
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Segments Covered |
Service, Deployment, Distribution Channel and Region |
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Regions Covered |
North America, Europe, Asia-Pacific, South America and Middle East & Africa |
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Fastest Growing Region |
Asia-Pacific |
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Largest Region |
Asia-Pacific |
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Report Insights Covered |
Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth, Demand, Recent Developments, Mergers and Acquisitions, New Equipment Type Launches, Growth Strategies, Revenue Analysis, Porter’s Analysis, Pricing Analysis, Regulatory Analysis, Supply-Chain Analysis and Other key Insights. |
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Open Banking Market Dynamics
Rising Digital Payments Ecosystem
The rising demand for digital payments and the evolving open banking landscape are mutually reinforcing, as open banking provides the framework and infrastructure to enable secure and seamless digital payment experiences.
The surge in digital payments, including mobile payments, online shopping, and peer-to-peer transfers, has significantly increased transaction volume. Open banking enables seamless integration of payment services and facilitates direct bank transfers, which supports the growing demand for digital payments.
Companies are also investing in improving digital payments and incorporating open banking solutions. For instance, the Arab National Bank (ANB), a financial institution in Saudi Arabia, integrated the open hybrid cloud platforms of Red Hat in December 2021 to support the development of digital banking and open finance. ANB seeks to develop relationships with ecosystem partners more efficiently and securely.
ANB is believed to achieve this on its Red Hat platform by utilizing a microservices integration layer and APIs to create cloud-native applications and Banking-as-a-Service (BaaS) offerings.
Banking Collaborations for Data Analytics
Collaboration allows companies to combine their strengths and expertise to create innovative and comprehensive product offerings. Banks and fintech firms are collaborating to develop integrated open banking solutions that leverage their respective capabilities. This collaboration leads to the creation of new products and services that offer customers greater value, convenience, and customization.
For instance, On April 4, 2021, UniCredit, a pan-European bank, renewed its partnership with Worldline, a growing company in payment services, for the Open Banking Third Party Provider (TPP) service. Furthermore, on September 7, 2021, Mastercard announced the acquisition of Aiia, a growing European open banking technology provider offering a direct connection to banks through a single API.
Regulatory Compliance
The regulatory compliance burden is a significant challenge for banks and financial institutions. Open banking involves sharing customer data with third-party providers, which raises concerns about data privacy, security, and consent. Regulators impose strict requirements to protect customer information and ensure secure data sharing.
Meeting these compliance obligations demands significant investments in robust data protection measures, infrastructure upgrades, and compliance processes. For smaller players, especially startups, the cost of compliance is a barrier to entry, limiting competition and innovation in the market.
Open Banking Market Segment Analysis
The Global Open Banking Market is segmented based on service, deployment, distribution channel and region.
Growing Banks' Investments On Digital Transformation Initiatives And Upgrading Their Technology Infrastructure
Banking & Capital Markets are expected to show significant growth in the Global Open Banking Market covering nearly 1/3rd in 2022. The Banking & Capital Markets sector encompasses traditional banks, financial institutions, and investment firms. It plays a vital role in open banking as it holds customer data and has established infrastructure, making it well-positioned to leverage open banking opportunities.
Furthermore, banks invest in digital transformation initiatives, upgrade their technology infrastructure, and develop user-friendly mobile and web applications. This digital shift allows customers to access their financial information, initiate transactions, and explore new financial products and services conveniently and in real-time. Open banking acts as an enabler for banks to deliver seamless digital experiences to their customers.
Source: DataM Intelligence Analysis (2023)
Open Banking Market Geographical Penetration
Europe’s Growing Need For Improved Online Payment Security
In 2022, Europe dominated the open banking market, generating more than 39.4% of global revenue. The regional market expansion can be attributed to the region's growing need for improved online payment security. The government's orders to banks to compel the opening of APIs is another factor driving market expansion in this region. The regional market is anticipated to increase as a result of the existence of several notable companies.
Furthermore, Europe has been at the forefront of open banking regulations with implementing the Revised Payment Services Directive (PSD2) in 2018. PSD2 mandates banks to provide open access to customer data through standardized APIs, enabling third-party providers to offer innovative financial services. The regulatory framework promotes competition, consumer protection, and innovation in the European financial sector.
Source: DataM Intelligence Analysis (2023)
Open Banking Market Players
The major global players include Banco Bilbao Vizcaya Argentaria S.A, Plaid Inc., TrueLayer Ltd, Finleap Connect, Finastra, Tink, Jack Henry & Associates, Inc, Mambu, MuleSoft and NCR Corporation.
COVID-19 Impact on Open Banking Market
COVID Impact
The COVID-19 pandemic accelerated the adoption of digital solutions across industries, including the financial sector. With lockdowns and social distancing measures in place, there was an increased demand for remote banking services. Open banking, emphasizing digital channels and remote access to financial data, gained further relevance during this time.
Furthermore, the pandemic caused a shift in consumer behavior, with more people relying on online banking, digital payments, and contactless transactions. Open banking facilitated the development of innovative solutions, such as budgeting tools, digital wallets, and personalized financial management apps, to cater to consumers' changing needs and preferences.
Ukraine-Russia War Impact
The ongoing conflict between Ukraine and Russia has created geopolitical tensions that can impact the stability of financial systems in the region. Disruptions in the banking sector, infrastructure damage, and economic uncertainty can indirectly affect the open banking market.
In regions affected by geopolitical conflicts, regulatory and security concerns may arise. Governments and regulatory bodies may divert their attention and resources towards addressing immediate security and stability issues, potentially leading to delays or changes in open banking initiatives and regulations.
Key Developments
- On 21 February 2023, A white paper co-authored by NatWest and NAB has been released, and it examines the similarities between the UK's Open Banking system and Australia's Consumer Data Right (CDR).
The agenda-setting whitepaper highlights how the two countries have diverged in their journeys to implementing these frameworks, particularly about their respective scope in terms of "breadth versus depth," as well as the similarities in the policies that underpin both regimes: to increase competition, innovation, and to empower consumers with control over their data.
- On April 6, 2023, At the Merchant Payment Ecosystem Awards in Berlin, Germany, Nuapay (EML Payments Limited's Open Banking business) received recognition for its outstanding Authenticated Mandates solution and won the coveted Best Use of Open Banking for Payments award.
- On April 4, 2021, UniCredit, a pan-European bank, renewed its partnership with Worldline, a growing company in payment services, for the Open Banking Third Party Provider (TPP) service.
Why Purchase the Report?
- To visualize the Global Open Banking Market segmentation based on service, deployment, distribution channel and region and understand key commercial assets and players.
- Identify commercial opportunities by analyzing trends and co-development.
- Excel data sheet with numerous open banking market-level data points with all segments.
- PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
- Product mapping available as Excel consisting of key products of all the major players.
The Global Open Banking Market Report Would Provide Approximately 61 Tables, 58 Figures And 217 Pages.
Target Audience 2024
- Manufacturers/ Buyers
- Industry Investors/Investment Bankers
- Research Professionals
- Emerging Companies
