Open Banking Market Insights and Growth by 2031
The open banking is expected to expand at a CAGR of 28.3% from 2023 to 2031. The adoption of the open baking platform by major players is projected to assist the open banking market growth, as it is becoming recognized as a success factor for several financial firms. Open banking is a new concept, and the market is predicted to expand due to favorable government rules that control the usage of open banking platforms in a variety of financial and banking services. Furthermore, the introduction of new types of digital currencies by the central governments of various nations is expected to increase demand for open banking platforms that allow digital currencies to be used.
Open Banking Market Analysis
The increased use of new wave apps and services is a crucial factor contributing to the expansion of the open banking business. Furthermore, increased customer involvement and attendance by banking consumers are required to drive the expansion of the open banking business. Furthermore, there are other advantages to using an open banking platform that benefit all parties involved in the financial services sector, including banks, corporations, Fintechs, and entrepreneurs. This is a significant aspect in promoting the growth of the open banking sector.
Open Banking Market Overview
- Open banking is a financial instrument that openly publishes or securely shares customers' data through an application programming interface (APIs) with third party service providers. APIs are used as a protected method of communication between third-parties service providers and online banking systems. An open banking API provides security for private data of bank customers which is used by third party’s service providers. These APIs used by banks can be connected with third-party technology to perform certain banking data-related operations, promoting the growth of the open banking sector. The open banking platform is used for personal financial management, allowing customers to access snapshots of their financial histories. It is also used to perform an affordability check, which helps to streamline loan processes by giving lenders one-time access to a user's bank data.
REGIONAL FRAMEWORK
Open Banking Market Driver and Opportunities
Substantial Benefits of Open Banking to Drive the Open Banking Market
- Open banking benefits the whole value chain of the financial services industry, including consumers, enterprises, Fintech companies, banks, and institutions. The deployment of open banking across the sector provides customers with access to superior banking services as well as new and tailored financial solutions.
- Open banking encourages banks to give more personalized and relevant product offerings to clients by learning about their demographics, needs, and other trustworthy financial information, such as KYC documents.
Improved Customer Engagement to Create Lucrative Market Opportunities
- The banking and financial organization develops its own application programming interfaces (APIs) that enable third companies and banks to create innovative services, resulting in increased financial revenue.
- Additionally, an open banking application platform invites clients to engagae with their financial data in novel ways. Furthermore, banks are recognizing the value of open banking and improving offerings that provide user experience and engagement.
- Further, banks are identifying the potential of open banking and improving services offering customer engagement and customer experience. This in turn is expected to boost the open banking market growth.
Open Banking Market Report Segmentation Analysis
The key segment that contributed to the derivation of the open banking market analysis is type.
- The app market segment dominated the market in 2023. The supremacy can be attributed to the widespread availability of smartphones worldwide. The segment's growth is predicted to be driven by the increasing adoption of mobile applications for a variety of reasons, including purchasing and selling products and services.
- The banking and capital markets segment dominated the market in 2023. The increased requirement for better financial management among millennials is projected to fuel the segment's expansion. People's shift away from traditional investment methods and toward smart investment solutions is projected to provide profitable opportunities for the market.
Open Banking Market Share Analysis By Geography
- The scope of the open banking market is primarily divided into five regions - North America, Europe, Asia Pacific, Middle East & Africa, and South America.
- Asia Pacific is expected to expand at a fastest CAGR during the projection period. The regional market's growth can be ascribed to increased knowledge of the benefits of open banking systems in countries such as China, India, and Japan. The rapid development of digital payment services in Asia Pacific is also likely to boost the regional industry. For example, in August 2021, the online payment network Google Pay completed one billion transactions in India.
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MARKET PLAYERS
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Open Banking Market Driver and Opportunities
Substantial Benefits of Open Banking to Drive the Open Banking Market
- Open banking benefits the whole value chain of the financial services industry, including consumers, enterprises, Fintech companies, banks, and institutions. The deployment of open banking across the sector provides customers with access to superior banking services as well as new and tailored financial solutions.
- Open banking encourages banks to give more personalized and relevant product offerings to clients by learning about their demographics, needs, and other trustworthy financial information, such as KYC documents.
Improved Customer Engagement to Create Lucrative Market Opportunities
- The banking and financial organization develops its own application programming interfaces (APIs) that enable third companies and banks to create innovative services, resulting in increased financial revenue.
- Additionally, an open banking application platform invites clients to engagae with their financial data in novel ways. Furthermore, banks are recognizing the value of open banking and improving offerings that provide user experience and engagement.
- Further, banks are identifying the potential of open banking and improving services offering customer engagement and customer experience. This in turn is expected to boost the open banking market growth.
Open Banking Market Report Segmentation Analysis
The key segment that contributed to the derivation of the open banking market analysis is type.
- The app market segment dominated the market in 2023. The supremacy can be attributed to the widespread availability of smartphones worldwide. The segment's growth is predicted to be driven by the increasing adoption of mobile applications for a variety of reasons, including purchasing and selling products and services.
- The banking and capital markets segment dominated the market in 2023. The increased requirement for better financial management among millennials is projected to fuel the segment's expansion. People's shift away from traditional investment methods and toward smart investment solutions is projected to provide profitable opportunities for the market.
Open Banking Market Share Analysis By Geography
- The scope of the open banking market is primarily divided into five regions - North America, Europe, Asia Pacific, Middle East & Africa, and South America.
- Asia Pacific is expected to expand at a fastest CAGR during the projection period. The regional market's growth can be ascribed to increased knowledge of the benefits of open banking systems in countries such as China, India, and Japan. The rapid development of digital payment services in Asia Pacific is also likely to boost the regional industry. For example, in August 2021, the online payment network Google Pay completed one billion transactions in India.
MARKET PLAYERS
Open Banking Market Report Scope
Open Banking Market News and Recent Developments
Companies adopt inorganic and organic strategies such as mergers and acquisitions in the open banking market. Some of the recent key market developments are listed below:
- In July 2022, Finastra and HSBC collaborated together to work on API-driven connectivity to offer banking as a service FX capability for mid-sized banks. [Source: Finastra, Company Website]
Open Banking Market Report Coverage & Deliverables
The open banking market forecast is estimated based on various secondary and primary research findings, such as key company publications, association data, and databases. The market report "Open Banking Market Size and Forecast (2021–2031)" provides a detailed analysis of the market covering below areas-
- Market size & forecast at global, regional, and country levels for all the key market segments covered under the scope.
- Market dynamics such as drivers, restraints, and key opportunities.
- Key future trends.
- Detailed PEST & SWOT analysis
- Global and regional market analysis covering key market trends, key players, regulations, and recent market developments.
- Industry landscape and competition analysis covering market concentration, heat map analysis, key players, and recent developments.
- Detailed company profiles.
- Sample PDF showcases the content structure and the nature of the information with qualitative and quantitative analysis.
- Request discounts available for Start-Ups & Universities
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
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to segments covered.
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
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to country scope.
Frequently Asked Questions
The global open banking market was estimated to grow at a CAGR of 28.3% during 2023 - 2031.
Growing adoption of advanced technologies such as AI and cloud computing and increasing fintech collaborations are the major factors that propel the global robo-advisory market.
Changing payment ecosystem to play a significant role in the global open banking market in the coming years.
The major players holding majority shares are Bannco Bilbao Vizcaya Argentaria, S.A., Crédit Agricole, DemystData, Ltd., Finleap connect, and Finastran.
Asia Pacific is anticipated to grow with a high growth rate during the forecast period.
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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