Open Banking Systems Market Outlook 2031
The global open banking systems market size was valued at USD 20.79 Billion in 2022 and is anticipated to reach USD 127.76 Billion by 2031, expanding at a CAGR of 22.3% during the forecast period, 2023 – 2031. The growth of the market is attributed to the exponential shift towards consolidated technological improvement from independent technology projects of retail banks.
Open banking is additionally known as open bank data. Open banking is managing an account benefit in which the bank account information is shared through a protected open application programming interface (APIs) to third-party administration suppliers.
These APIs provide a secure way to share financial data between two parties. Besides, data generated through API is utilized by banks and third party organizations to plan applications and administrations, which are advertised to the client. For the consumer, open banking provides frictionless commerce, more choices, and better service.
The COVID-19 pandemic outbreak has brought a positive impact on the market. During the pandemic lockdown imposed by government bodies increased the demand of contactless payment as well and payments through the use of pin and chip machines also increased. Furthermore, many companies also came up with new innovative solutions for open banking system during a pandemic, which lead to an increase in demand of open banking.
Open Banking Systems Market Trends, Drivers, Restraints, and Opportunities
- Rising use of online platform for payments across the globe is one of the key factor driving the market growth.
- Increasing advantages of an open banking platform that are beneficial to bank, consumers, and businesses is projected to drive the market expansion during the forecast period.
- Growing concern about data security acts as a major challenge that can restrict the market growth in the coming years.
- Escalating cases of online financial frauds can hamper the market growth during the projected timeline.
- Using big data analytics and Artificial intelligence (AI) for more personalized open baking solutions is projected to create significant growth opportunities for the market.
Scope of Open Banking Systems Market Report
The report on the global open banking systems market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report
Open Banking Systems Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
Service Types (Information Services, Transactional Services, and Communicative Services) and Distribution Channels (Distributors, Bank Channels, Aggregators, and App Markets)
Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
Key Players Covered in the Report
JackHenry & Associates, Inc.; DemystData; FinGenius; Malauzai Software Inc.; MineralTree, Inc.; Accern Corp.; D3 Technology, Inc.; Figo GmbH; FormFree Holdings Corp.; and Mambu GmbH
Open Banking Systems Market Segment Insights
Cash management increases the transactional segment market share
On the basis of service types, the global open banking systems market is divided into information services, transactional services, and communicative services. The transactional service segment is estimated to account for a significant market share during the forecast period attributed to the rising adoption of transactional services by small & medium business, financial institutes, and government agencies for cash management.
Additionally, rise in use of online platform for transactions and surge in accessibility of internet across the globe, which presents a major factor driving the segment. However, the information service segment is anticipated to grow at a high CAGR during the projected period attributed to the increased use of information service to provide customized account information to consumers.
App markets segment is estimated to expand at robust growth rate
Based on distribution channels, the market is fragmented into, bank channels, aggregators, and app markets. The app markets segment is estimated to expand at robust growth rate during the forecast period owing to increase in adoption of new applications, which help customers to make purchases related to services and products.
On the other hand, the bank channels segment is projected to expand at a considerable CAGR during the forecast period attributed to the crowdsourcing of new technologies and use of API, which can be utilized by third-party developers to develop applications and services.
In terms of region, the global open banking systems market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is anticipated to constitute a key share of the market during the projected period owing to banking institutions in the region are making aggressive investments in developing APIs.
However, the Asia Pacific market is anticipated to grow at a rapid pace during the forecast period due to the increasing adoption of open banking systems by the emerging economies in the region.
The global open banking systems market has been segmented on the basis of
- Information Services
- Transactional Services
- Communicative Services
- Bank Channels
- App Markets
- Asia Pacific
- North America
- Latin America
- Middle East & Africa
Key players competing in the global open banking systems market are JackHenry & Associates, Inc.; DemystData; FinGenius; Malauzai Software Inc.; MineralTree, Inc.; Accern Corp.; D3 Technology, Inc.; Figo GmbH; FormFree Holdings Corp.; and Mambu GmbH.
Companies are focusing on investment in R&D for the development of banking solutions based on APIs that can be operated outside the core business of the banks. Furthermore, companies are widely engaging in strategic partnership, merger & acquisition, new product launch, and collaborations to boost their market share and acquiring new buyers.For instance,
In April 2020, HSBC Bank plc, a UK-based investment banking company. This company increased its investment in the use of AI for banking solutions. This investment was aimed to develop AI based techniques to manage financial crime risk, choose assets in which to invest, and analyze the data.
- In June 2021, Tink AB a European open banking platform was acquired by Visa Inc., the U.S. based financial services company. The acquisition is aimed to provide dependable and secure platform for innovation and accelerate European open banking adoption.