Open Banking Market Analysis Report By Services, Solutions, Deployment,DistributionChannel,Companies,AndGrowthForecasts
The global open banking market size is expected to reach USD 135.17 billion by 2030, growing at a CAGR of27.2% from 2023 to 2030, accordingto a new studyconducted by Grand View Research, Inc. The global open banking market is expanding as a result of favorable government legislation, improved overall customer involvement made possible by open banking APIs, and an increase in the adoption of innovative applications and services. In addition, the relocation in the focus of retail banks toward consolidated technological enhancements also bodes well with the market’s growth.
Open Banking Market Report Highlights
The banking & capital markets segment dominated the market in 2022. The changing investment needs of the new age population are expected to propel segment growth. People are looking for more flexible and worthy investment options offered through advanced platforms.
The cloud segment is anticipated to witness the fastest growth owing to the increased adoption of cloud technology across the banking sector. Banks are leveraging the benefits of open banking by implementing strategic cloud solutions. As open banking evolves, the cloud is projected to become a critical technology in the banking sector.
The app markets segment dominated the market in 2022. The segment growth can be attributed to the rising utilization of smartphones and applications for numerous purposes, such as mobile banking. Open banking applications leverage APIs to provide various services, such as rapid payments, a financial dashboard displaying accounts from several banks, proof of income, credit status verification, and money-saving advice to customers.
The Asia Pacific regional market is anticipated to witness the fastest growth over the forecast period. The growing technological awareness in developing countries of the region is expected to play a decisive role in driving the growth of the regional market. Moreover, the Asia Pacific region is portraying an increased willingness of customers to share personal data in exchange for more customer-tailored services.
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Open Banking is a system that promotes the secure sharing of financial information between different financial institutions, service providers, and consumers. It leverages the use of open application programming interfaces (APIs) to enable customers to grant authorized third-party providers access to their financial data. This access facilitates the development of innovative financial products and services, creating a more competitive and customer-centric banking ecosystem. Open Banking allows individuals and businesses to securely share their account information, transaction history, and other financial data with authorized third parties, such as fintech companies or other banks. This data sharing enables the development of personalized financial solutions, improved financial management tools, and seamless integration of various financial services. Open Banking aims to enhance transparency, foster competition, and empower consumers with greater control over their financial data and decision-making.
Open Banking has gained momentum worldwide, with various countries implementing regulatory frameworks to facilitate its adoption. Regions such as the European Union, the United Kingdom,
Australia, and Singapore have made significant strides in establishing Open Banking standards and promoting its implementation. Financial institutions have been actively developing and expanding their application programming interfaces (APIs) to provide secure access to customer data. This expansion includes providing access to account information, payment initiation services, and transaction history, among other functionalities. This increased API availability allows third-party providers to build innovative financial products and services. Open Banking has encouraged collaboration between traditional financial institutions and fintech companies. Banks are partnering with fintech firms to leverage their technological expertise and develop innovative solutions that enhance customer experiences and offer new services. These collaborations have resulted in the creation of digital platforms, mobile apps, and personalized financial management tools.
Data security and privacy have become paramount in the Open Banking landscape. Regulations and standards are being implemented to ensure secure data transmission, consent management, and customer control over their financial information. Technologies like encryption, tokenization, and secure data sharing protocols are being adopted to safeguard customer data and build trust among users. Initially, Open Banking primarily focused on payment initiation services. However, the scope of Open Banking has expanded to include other financial domains such as lending, investment, and insurance. This broader approach allows for greater integration of various financial services and enables customers to access a wide range of personalized offerings from different providers.
Key industry players are aggressively investing in offering enhanced services to their customers. For instance, in June 2022, Mastercard announced its latest open banking feature, named Pay by link, through its banking pioneer in Europe, Aiia. This feature is expected to eliminate needless payment stages for companies from any sector by developing a straightforward link that enables clients to pay instantaneously in any situation. It is closely related to Mastercard's open banking agenda, which seeks to usher in a new era of choice, convenience, and personalization in a secure manner.
Increased investment in the open banking space by prominent players is expected to drive market growth over the forecast period. For instance, Visa, Inc. purchased Tink in June 2021 for USD 2.15 billion. The acquisition is anticipated to hasten the adoption of open banking in Europe through the provision of a reliable and secure platform for innovation. As a result, consumers have more control over their finances, including money management and financial goals.
The outbreak of the COVID-19 pandemic is expected to play a vital role in driving the growth of the open banking market over the forecast period. Since the pandemic, the banking industry has been continuously evolving to improve the customer experience and ease the process of banking for consumers. In addition, the rapid adoption of digitalization is expected to create a positive outlook for the market.
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Open Banking Market Insights By Region
Europe dominated the market, growth can be ascribed to the increasing requirement for improving online payment security in the region. Another aspect promoting market expansion in this region is the government's directives for banks to compel the opening of APIs. The presence of several prominent players in the region is further expected to fuel the regional market growth Asia Pacific is anticipated to grow at the highest pace. The growth of the regional market can be attributed to the growing awareness in countries such as China, India, and Japan, about the benefits offered by open banking
systems. The rapid developments in digital payments services in the Asia Pacific are also expected to contribute to the growth of the regional market
Competitive Analysis By Major Players
The market for open banking can be regarded as being extremely competitive and characterized by the existence of numerous notable industryplayers. To improve their offers, industryleaders are exploring a variety of methods, including new product releases and geographic growth, among others. Market players are collaborating to enhance their product offerings The collaboration is aimed at providing merchants an inexpensive solution to accept payments. Some of the prominent players in the open banking market are:
Bannco Bilbao Vizcaya Argentaria, S.A.
Crédit Agricole
DemystData, Ltd.
Finleap connect
Finastra
FormFree Holdings Corporation
Jack Henry & Associates, Inc.
Segmented the global open banking market based on services, deployment, distribution channel, and region.
Research Methodology
We employ a comprehensive and iterative research methodology focused on minimizing deviance in order to provide the most accurate estimates and forecasts possible. We utilize a combination of bottom-up and top-down approaches for segmenting and estimating quantitative aspects of the market. Data is continuously filtered to ensure that only validated and authenticated sources are considered. In addition, data is also mined from a host of reports in our repository, as well as a number of reputed paid databases. Our market estimates and forecasts are derived through simulation models. A unique model is created and customized for each study. Gathered information for market dynamics, technology landscape, application development, and pricing trends are fed into the model and analyzed simultaneously.
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About Grand View Research
Grand View Research provides syndicated as well as customized research reports and consulting services on 46 industries across 25 major countries worldwide. This U.S. based market research and consulting company is registered in California and headquartered in San Francisco. Comprising over 425 analysts and consultants, the company adds 1200+ market research reports to its extensive database each year. Supported by an interactive market intelligence platform, the team at Grand View Research guides Fortune 500 companies and prominent academic institutes in comprehending the global and regional business environment and carefully identifying future opportunities.
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