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Global $98.5 Billion Open Banking Market Trends, Opportunities, & Forecasts, 2029F

By PR Newswire

PR Newswire
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DUBLIN, March 5, 2024 /PRNewswire/ -- The "Open Banking Market - Global Industry Size, Share, Trends, Opportunity, & Forecast 2019-2029" report has been added to  ResearchAndMarkets.com's offering.

The Global Open Banking Market was valued at USD 22.54 billion in 2023 and is anticipated to grow with a CAGR of 27.9% through 2029, reaching USD 98.52 billion

The Global Open Banking Market is experiencing a significant surge, driven by the growing demand for enhanced financial services, technological advancements, and regulatory initiatives promoting financial transparency. Open banking refers to a system where financial institutions open up their data and services to third-party providers through APIs (Application Programming Interfaces).

This approach fosters innovation by allowing external developers to create new applications and services that leverage financial data. The market is witnessing a paradigm shift in consumer behavior, with individuals seeking more personalized and convenient banking solutions. Open banking facilitates seamless integration of various financial products and services, empowering consumers with a holistic view of their financial landscape.

Moreover, the rise of FinTech firms and technology giants entering the financial services sector is intensifying competition and prompting traditional banks to embrace open banking models. As a result, the market is experiencing collaborations, partnerships, and mergers to harness synergies between financial institutions and technology innovators.

The adoption of open banking is also gaining momentum due to regulatory initiatives, such as the Revised Payment Service Directive (PSD2) in Europe, which mandates banks to open up access to customer account information and payment services. With a projected compound annual growth rate (CAGR) in the double digits, the Global Open Banking Market is poised for continued expansion, reshaping the financial services landscape on a global scale.

Market Drivers:

Regulatory Initiatives and Compliance Requirements:

  • Governments and regulatory bodies globally recognize benefits of open banking.
  • Mandates like PSD2 in Europe shape open banking, promoting competition and innovation.

Technological Advancements and API Integration:

  • Rapid adoption of APIs facilitates seamless data exchange among financial institutions and third-party providers.
  • Technologies like cloud computing, AI, and blockchain further accelerate open banking integration.

Changing Consumer Behavior and Expectations:

  • Consumers seek personalized, digitally-driven banking experiences.
  • Open banking empowers individuals with greater control over their financial data and access to diverse financial products.

Emergence of FinTech and Non-Banking Players:

  • FinTech firms leverage open banking to offer innovative, niche financial solutions.
  • Partnerships between traditional banks and non-banking entities intensify competition and drive open banking adoption.

Globalization and Cross-Border Transactions:

  • Open banking facilitates seamless, efficient cross-border transactions.
  • Collaboration between financial institutions from different regions standardizes open banking practices globally.

Key Market Challenges:

Security and Data Privacy Concerns:

  • Sharing financial data raises concerns about cybersecurity threats and data breaches.
  • Implementing robust security measures and compliance with data protection regulations are imperative.

Standardization and Interoperability:

  • Lack of universal standards complicates open banking development and integration.
  • Global collaboration needed to establish common APIs, data formats, and security protocols.

Resistance from Traditional Banking Institutions:

  • Legacy systems, organizational cultures, and fear of losing control hinder traditional banks' adoption of open banking.
  • Strategic partnerships with FinTech firms essential for modernization and innovation.

Regulatory Complexity and Compliance Burden:

  • Evolving regulatory landscape poses challenges for compliance across jurisdictions.
  • Harmonization of regulatory frameworks globally needed to streamline compliance efforts.

Trust and Consumer Adoption:

  • Building trust among consumers crucial due to skepticism about sharing financial data.
  • Transparent communication, robust authentication mechanisms, and financial literacy efforts necessary to foster consumer confidence.

Key Market Trends:

Expansion of Open Banking Ecosystems:

  • Open banking ecosystems broaden to include diverse participants beyond banks and FinTech firms.
  • Collaboration leads to more comprehensive and customer-centric financial solutions.

Rise of Embedded Finance:

  • Financial services integrated directly into non-financial platforms, enhancing accessibility and convenience.
  • Open banking APIs facilitate seamless embedding of financial functionalities into various applications.

Increased Emphasis on Data Analytics and AI:

  • Advanced analytics and AI technologies leverage financial data to deliver personalized and predictive services.
  • AI algorithms enhance operational efficiency and customer engagement within open banking interfaces.

Regulatory Sandboxes and Innovation Hubs:

  • Governments establish controlled environments for testing new open banking products and services.
  • Collaboration between regulators and industry stakeholders fosters innovation while ensuring consumer protection.

Focus on Financial Inclusion:

  • Open banking addresses gaps in access to financial services, particularly for underserved populations.
  • Development of inclusive financial ecosystems aligns with global efforts to broaden financial inclusion.

Segmental Insights:

Financial Services Insights:

  • Payments Segment: Witnessing robust demand driven by consumers' preference for faster, innovative payment solutions.

Distribution Channel Insights:

  • App Market Segment: Experiencing significant growth as consumers increasingly rely on mobile applications for banking needs.

Regional Insights:

  • North America Region: Experiencing substantial demand due to digitalization of financial services and regulatory support for open banking initiatives.

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Open Banking Market.

  • Bannco Bilbao Vizcaya Argentaria, S.A.
  • Credit Agricole
  • DemystData, Ltd.
  • Finleap connect
  • Finastra
  • FormFree Holdings Corporation
  • Jack Henry & Associates, Inc.
  • Mambu
  • MineralTree, Inc.
  • NCR Corporation

Report Scope

Open Banking Market, By Financial Services:

  • Banking & Capital Markets
  • Payments
  • Digital Currencies
  • Value Added Services

Open Banking Market, By Distribution Channel:

  • Bank Channel
  • App Market
  • Distributors
  • Aggregators

Open Banking Market, By Region:

  • North America
  • United States
  • Canada
  • Mexico
  • Europe
  • France
  • Germany
  • Spain
  • Italy
  • United Kingdom
  • Asia-Pacific
  • China
  • Japan
  • India
  • Vietnam
  • South Korea
  • Middle East & Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Turkey
  • Kuwait
  • Egypt
  • South America
  • Brazil
  • Argentina
  • Colombia

For more information about this report visit https://www.researchandmarkets.com/r/ilyyi0

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ResearchAndMarkets.com is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.

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SOURCE Research and Markets

First published on Wed, Mar 6, 2024

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