Open Banking Market

Open Banking Market Overview from 2024 to 2034

The demand for open banking is expected to record an impressive growth of 19.7% during the forecast period. The market value is projected to increase from USD 22,160 million in 2024 to USD 133.5 billion by 2034. At the end of 2023, the open banking market registered a CAGR of 19.3%.

Open Banking Market Size, Analysis, and Insights

• Customers are increasingly demanding better and personalized financial services. Open banking enables customers to access their financial data from multiple banks and financial institutions in one place, thereby providing them with a more comprehensive and holistic view of their financial position. This, in turn, enables customers to make more informed financial decisions and manage their finances more effectively.
• The increasing competition among financial institutions with innovative products accelerates growth. With the emergence of fintech start-ups, traditional banks are under pressure to innovate and offer more customer-centric services.
• Open banking allows traditional banks to collaborate with fintech start-ups and offer innovative financial services to customers. Open banking is also driving the development of new business models and revenue streams for financial institutions.
• With open banking, financial institutions can leverage their customer data to offer personalized financial products and services, such as personalized investment portfolios, savings plans, and insurance products. This can create new revenue streams for financial institutions and help them stay competitive in the evolving financial landscape.

Attributes	Details
Market Size, 2024	USD 22,160 million
Market Value, 2034	USD 133.5 billion
Value CAGR (2024 to 2034)	19.7%

Key Opportunities for the Open Banking Market

• Open banking is an emerging concept that is transforming the financial industry. It allows third-party service providers to access customers' financial data from different banks through APIs.
• Open banking provides a great opportunity for banks, fintechs, start-ups, and other service providers to innovate and offer secured and simplified products to their customers.
• Banks can offer innovative products and services to customers, which can be monetized. For example, banks can leverage data analytics to offer customers personalized financial advice or customized investment advice.
• By offering innovative and personalized services, banks can deepen their relationships with customers. This can result in increased customer retention and loyalty.
• Banks can streamline many of their internal processes by providing a more secure and standardized way of sharing data. This can lead to cost savings and increased efficiency.

Challenges for the Open Banking Market

• As banks open up their data to third-party providers, there is a risk that sensitive customer data could be compromised. Moreover, the issue of standardization is expected to hamper the market growth in the forecast period. Different banks use different APIs and data formats, which can make it difficult for third-party providers to access and use the data.
• Regulatory compliance is an ongoing issue for the open banking market. Regulations are constantly changing, and banks and providers need to stay up to date with the latest rules and guidelines to ensure they are compliant. This can be a challenging and time-consuming process, and failure to comply can result in hefty fines and reputational damage.

Category-wise Insights

The Open Banking Platforms Segment Dominates the Market by Solution

Attributes	Details
Solution	Open Banking Platforms
Market Share in 2024	70.2%

• These platforms offer a comprehensive solution that enables banks to share their customer data with third-party service providers efficiently. This facilitates the development of innovative financial products and services that can be seamlessly integrated with the existing banking infrastructure.
• Open banking platforms provide a secure environment for data sharing, which is critical in the banking industry. They use advanced security measures such as encryption and tokenization to protect sensitive customer information, thus building customer trust and reducing the risk of fraud.
• Open banking platforms are highly scalable and customizable, which makes them suitable for banks of all sizes and types. They offer a range of APIs and developer tools that enable banks to create customized solutions that meet their specific needs.

The Retail & Commercials Banks Segment Dominates the Market by End User

Attributes	Details
End User	Retail & Commercials Banks
Market Share in 2024	19.9%

• The retail and commercial banks segment is dominating the open banking market due to its existing customer base and infrastructure. These banks already have a large consumer base and established relationships, giving them an advantage in offering new services under open banking regulations.
• They have the necessary infrastructure and technology to facilitate customer data sharing with third-party providers. This enables them to offer their customers a wider range of services, such as personalized financial advice and innovative payment options.
• Banks have the regulatory experience and expertise to handle the complex compliance requirements associated with open banking, which can be a barrier to entry for new players in the market.

Country-wise insights

Countries	CAGR from 2024 to 2034
United States	16.5%
Germany	19.2%
Japan	20.9%
China	20.2%
Australia	23.2%

Open Banking Market in the United States

• The rise of fintech companies in the United States is the key reason for the increasing demand for open banking. Numerous fintech companies are leveraging technology to provide innovative financial products and services that cater to the needs of consumers. Open banking provides these companies with the data they need to develop customized offerings tailored to individual customers' unique needs.
• The US government is moving forward with innovation in the financial services sector, leading to the introduction of regulations such as the Dodd-Frank Act and the Consumer Financial Protection Bureau (CFPB). These regulations have covered the way for new players to enter the market and for established players to explore new business models.
• Consumers increasingly demand more control over their financial data in the country. With open banking, consumers can share their data with third-party providers, enabling them to access a wider range of financial products and services. This can potentially increase competition and drive down costs, ultimately benefiting consumers.

Open Banking Market in Germany

• Consumers increasingly demand more control over their financial data and seek convenient and personalized financial services that meet their individual needs. Open banking has the potential to provide just that by allowing consumers to share their data securely and selectively with trusted third-party providers who can then offer custom-made financial products and services.
• Open banking is also seen as a way to promote financial inclusion and reduce the dominance of traditional banks. The increasing demand for open banking in Germany is driven by regulatory changes, consumer demand for personalized and convenient financial services, the potential for greater financial inclusion, and the shift toward digital banking accelerated by the pandemic.

Open Banking Market in Japan

• The growing popularity of fintech start-ups and the need for a more efficient and convenient banking system are driving the market of open banking in Japan. With the rise of digital banking, customers are looking for more flexibility and control over their finances, and open banking provides exactly that.

• This system has gained traction in Japan because consumers seek more tailored financial services and access to a wider range of products. By opening up their data to third-party providers, banks can offer customers more personalized services and better recommendations.
• The government has been encouraging banks and financial institutions to adopt open banking APIs, which has led to more start-ups entering the market, offering innovative solutions and driving competition.

Open Banking Market in China

• The Chinese government has been promoting financial innovation and digitalization, leading to new fintech players and a growing desire for open banking services.
• The rise of mobile payments in China has transformed how people conduct transactions, making it more convenient and efficient for users to share their financial data with third-party providers.
• Increasing demand for personalized financial products and services can only be achieved through open banking. Therefore, consumers want to have greater control over their financial data and be able to access a wide range of financial products and services from different providers without having to switch between different platforms.

Open Banking Market in Australia

• Increasing demand from both consumers and businesses is creating a pool of opportunities for open banking in Australia. Increasing awareness, chatbot functionality, predictive analytics, and a range of AI-based tools equipped with NPL driving the market.
• The increasing demand for open banking in Australia is also being driven by the surging fintech industry. According to a recent analysis, the fintech market in Australia is estimated to be around USD 4 billion, showcasing the increasing use of open banking APIs to develop innovative new products and services that can help customers manage their finances more effectively.
• This is creating more competitive and diverse financial services in Australia, which is ultimately benefiting consumers. According to the Australian Banking Association, accredited by ACCC in 2020, customers can share their card details with third parties to access better deals on banking products.

Competitive Landscape

With the surge of open banking regulations and APIs, a new ecosystem of fintech start-ups and traditional banking institutions is rising in emerging and developed economies. As the market continues to mature, it is interesting to see how these players evolve and compete with one another to capture market share and deliver innovative solutions to consumers.

Recent Developments

• In 2022, GoCardless signed Crowdz, an SME financing platform, to integrate open banking solutions. It features instant payment to the United Kingdom, the United States, and Europe, verified mandates to prevent fraud, and PayTo for instant payment and account verification.
• In 2022, PCI Pal announced the availability of Pay By Bank, its new open banking solution for contact centers. The approach enables businesses to reduce transaction costs while still providing speedy refunds.

Key Market Players

• Banco Bilbao Vizcaya Argentaria, S.A.
• Crédit Agricole
• Finastra
• Jack Henry & Associates, Inc.
• Mambu
• Nordigen Solutions
• NCR Corporation
• Revolut
• Finleap Connect
• Tink AB
• Yapily Ltd.
• Citygroup, Inc.
• HSBC Bank plc

Table of Content

• 1. Executive Summary
• 2. Market Overview
• 3. Market Background
• 4. Global Market Analysis 2019 to 2023 and Forecast, 2024 to 2034
• 5. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Services
  • 5.1. Banking & Capital Markets
  • 5.2. Payments
  • 5.3. Digital Currencies
  • 5.4. Value Added Services
• 6. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Deployment
  • 6.1. Cloud
  • 6.2. On-Premise
• 7. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Distribution Channel
  • 7.1. Bank Channels
  • 7.2. App Markets
  • 7.3. Distributors
  • 7.4. Aggregators
• 8. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Region
  • 8.1. North America
  • 8.2. Latin America
  • 8.3. Western Europe
  • 8.4. Eastern Europe
  • 8.5. South Asia and Pacific
  • 8.6. East Asia
  • 8.7. Middle East and Africa
• 9. North America Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country
• 10. Latin America Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country
• 11. Western Europe Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country
• 12. Eastern Europe Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country
• 13. South Asia and Pacific Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country
• 14. East Asia Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country
• 15. Middle East and Africa Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country
• 16. Key Countries Market Analysis
• 17. Market Structure Analysis
• 18. Competition Analysis
  • 18.1. Finleap connect
  • 18.2. Finastra
  • 18.3. FormFree Holdings Corporation
  • 18.4. Jack Henry & Associates, Inc.
  • 18.5. MineralTree, Inc.
  • 18.6. NCR Corporation
  • 18.7. Bannco Bilbao Vizcaya Argentaria, S.A.
  • 18.8. DemystData, Ltd.
  • 18.9. Mambu
  • 18.10. CREDIT AGRICOLE
• 19. Assumptions & Acronyms Used
• 20. Research Methodology