According to a new report published by Allied Market Research, titled, "Open Banking Market by Product Type, and Distribution Channel: Global Opportunity Analysis and Industry Forecast, 2019–2026," the global open banking market size was valued at $7,295 million in 2018, and is expected to reach $43,152 million by 2026, registering a CAGR of 24.4% from 2019 to 2026.
Open banking is a financial service which includes sharing of financial information electronically. Furthermore, open banking services make use of application programming interface (APIs) to carry out a secure transfer of financial data. In addition, the financial information is exchanges between banks and third-parties service providers. An open API offers security to private data of customers, such as a third party’s service providers collect user’s transaction history and patterns, which provides easy access to openly available data such as a bank’s product offerings. Thus, the financial information of collected for a customer is utilized in developing more advanced applications which are aimed at improving consumer experience associated with the use of financial services.
The major factor which contribute to the growth of open banking market include an increase in the number of people uses using new wave apps and services boosts the open banking market growth. In addition, an upsurge rise in customer engagement and attending banking customers need quickly boost the growth of the market. Furthermore, the rise in advantages of an open banking platform that makes beneficial to all stakeholders in the financial services industry includes consumers, businesses, Fintech’s, innovators, and banks. This is an important factor to that fosters the growth of the boost the market. However, an increase in events of online fraud and data insecurity is expected to restrict the open banking market growth. On the contrary, significant increases in the collaboration of financial service providers, and traditional banking with Fintech is an expected opportunity to boost growth of the market.
The global open banking market is studied on the basis of financial services, distribution channel, and region. By financial services, the market is divided into bank & capital market, payments, digital currencies, and others. As per distribution channel, it is divided into bank channels, app market, distributors, and aggregators. In-depth analysis of the open banking industry is provided for North America, Europe, Asia-Pacific, and LATAM.
According to financial services, banking and capital markets occupied the largest open banking market share in 2018. Furthermore, payments segment is also the fastest growing segment during the forecast period. The growth of the segment is attributable to surge in use of online platforms for making payments. Furthermore, the other factors that contribute to the growth of the market include the surge in the accessibility of internet across the globe.
By distribution channel, application market segment occupied the largest open banking market in 2018 owing to increase in adoption of new applications, which help customers to make purchases related to product and services. In addition, the distributors segment is expected to exhibit the fastest growth rate during the forecast period owing to surge in partnership of various firms present in the market.
By region, North America accounted for the major open banking market share in 2018 and is expected to continue this trend, owing to anticipated quick adoption of advanced technologies and presence of majority of key players. Moreover, robust innovation in the banking sector, is another major reason that contributes to the growth of this market. On the other side, Asia-Pacific is estimated to register the fastest growth during the forecast period attributed to owing to surge in number of banks, which invested in open application programming interface (APIs) management platforms.
Key Findings of the Study:
- By financial service, the banking and capital markets segment accounted for half of the share of open banking market in 2018.
- Region wise, Asia-Pacific and LATAM is anticipated to grow at the highest CAGR throughout the forecast period.
- UK accounted approximately half of the share of the open banking market, in 2018.
- By distribution channel, app market segment accounted for two-fifths share of open banking market in 2018
The key players operating in the global open banking market include Accern Corporation, Credit Agricole DemystData, Figo GmbH, Finastra, FormFree, Jack Henry & Associates, Inc., Mambu GmbH, MineralTree Inc., and NCR Corporation.