Open Banking Market Size Share Growth Trends and Forecast 2024-2031

Market Overview :

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.

Market Trends :

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.

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Market Segmentation :

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.

Geographical Share :

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.

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Competitive Landscape

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.

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