USD 20.5 Billion
Report ID:
SQMIG40A2004 |
Region:
Global |
Published Date: November, 2024
Pages:
157
|Tables:
90
|Figures:
76
Open Banking Market size was valued at USD 20.5 Billion in 2023 and is poised to grow from USD 25.99 Billion in 2024 to USD 173.21 Billion by 2032, growing at a CAGR of 26.8% during the forecast period (2025-2032).
Through APIs, open banking allows third-party financial service providers to get access to bank and non-bank financial institutions' transactions and other financial data. Open banking has numerous benefits, including improved experience, more controlled and safe financial data, and better access to a greater choice of financial services. These benefits are mainly responsible for the global open banking market growth throughout the projection period. The evolving payment environment and the growing use of APIs are encouraging market expansion.
For instance, more than 87% of American consumers use open banking to connect their financial accounts with third parties, according to Visa's Open Banking Consumer Survey, which was conducted in April 2022. However, only 34% of American customers know that open banking is what makes such services possible. The industry is also projected to grow based on improved broadband connectivity and growing internet penetration, which will push the market upward throughout the forecast period. The growing adoption of open banking is expected in the industry based on fast digitalization and a growing adoption of technologies such as big data analytics, machine learning, and artificial intelligence globally. It will attract more clients by improving the user experience and customizing services using big data analytics. APIs' increased security is another main reason that propels the growth of the market. In addition, the growth in global e-commerce and online buying trends supports the industry's growth.
US Open Banking Market is poised to grow at a sustainable CAGR for the next forecast year.
Market snapshot - 2025-2032
Global Market Size
USD 20.5 Billion
Largest Segment
On-Premise
Fastest Growth
Cloud
Growth Rate
26.8% CAGR
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Global Open Banking Market is segmented by Offering, by Deployment, by Digital Channel, by application, by End User and by Region. Based on Offering, the market is segmented into Solutions, Services. Based on Deployment, the market is segmented into Cloud, On-premise. Based on Digital Channel, the market is segmented into Web Portals, Mobile Apps. Based on application, the market is segmented into Payment, Banking, Digital Lending, Wealth Management, Other. Based on End User, the market is segmented into Central Banks, Retail & Commercials Banks, Investment Banks, Insurance Companies, Credit Unions, Mortgage/Loan Providers, Wealth Management Firms, Fintechs, Payment Service Providers. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & and Africa.
Based on the 2024 global open banking market forecast, the banking & capital category, which is the market leader, accounted for 45.6% of global revenue. It can be ascribed that this is due to the evolving demand for efficient money management, which is being sought by millennials who want nothing less than smart investing techniques and strategies. In this sense, the growth through the segment is further driven by a transition away from the classical investment strategies and towards innovative and more dynamic ones, including AI-driven platforms. These platforms enhance consumer delight and experience through analytics and algorithms, which can give personalized investment advice. It is predicted that this market will expand due to the widespread adoption of such technologies by institutions since profitable opportunities are projected from the need for more intelligent investment strategies and complex, customized financial solutions.
Over the forecast period, the payments segment is projected to grow at the fastest CAGR. Increasing global internet penetration in addition to increasing use of diverse platforms for online payments reflects typical growth. Such changes provided banks with an opportunity to collaborate with or form partnerships with these platform providers to improve their market position and gain competitive advantage. Further, the number of new payment services launched by industry players is a growth factor of the segment. For instance, PCI Pal, the company that specializes in financial services, released the open banking solution Pay by Bank for call centers in September 2022. This launch allowed merchants to issue faster refunds and reduce transaction costs while enabling them to minimize chargeback and fraud risk.
As per the 2024 global open banking market analysis, the on-premises category commanded the largest revenue share from the market due to the quality service and easy access offered to clients. This section provides financial organizations with control over their data and infrastructure and enables them to manage their systems internally. One other driving factor of the growth in this segment is increased BFSI usage of APIs. BFSI allows the bank, in collaboration with the third-party provider, to give innovative integrated services. Besides this, new open banking platforms that change consumer usage of their financial information also call for new more unique, non-traditional ways of managing money. This mix of integration capabilities and customer-centric features is working to accelerate the growth of this segment.
The cloud segment is expected to witness the fastest compound annual growth rate (CAGR) during the projection period due to the ability of cloud deployment services to help banks collect, analyze, and provide specifically tailored services based on huge volumes of customer data. Cloud technology enables access to extensive data resources that help upgrade the operating efficiency of banks while allowing them to move toward offering more niche financial solutions. Cloud service also maintains the highest standards of security and safeguards against possible loss of or exposure of data while also ensuring that all legal compliance measures are followed appropriately. Another benefit for financial institutions interested in developing and innovating further is the scalability, flexibility, and real-time processing ability of cloud services. This will be the key driver for growth in the segment.
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Europe dominated the open banking industry in 2024 with a market share of 36.9% because of its substantial focus on the enhancement of the security of online payments. Boosting demand for secure online transactions and expanding use of open financial platforms are the two major growth drivers for market expansion. Banks then would be mandated to open their APIs as government needs, specifically that of the European Union's Payment Services Directive (PSD2), promote innovation and collaboration around the financial industry. Furthermore, the market growth is facilitated by the fact that there are many respectable fintech companies, banks, and technology providers in Europe. During the later phases of evolution, open banking ecosystems will raise new possibilities for financial institutions to enhance the security of transactions and the overall customer experience throughout the region.
The North America open banking market will experience a significant compound annual growth rate (CAGR) of 27.9% from 2025 to 2032. The rapid growth in the North America open banking market will be primarily because of the rise in customer demand for seamless and personalized digital banking experiences. This will also witness area banks invest highly in APIs as they collaborate with fintech companies to expand the services they are offering. Banks, therefore, gain through such a venture as they would be able to innovate in such a tech-inclined financial world. The North American market continues to develop due to the use of open banking solutions, which also enables more effective payments, improved data security, and more financial inclusion.
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Governmental Policies and Programs
Demand for Digital Services by Consumers
Data Security and Privacy Issues
Complex Integration and Legacy Systems
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The global open banking sector has a dynamic competitive environment, with fintech companies, technology suppliers, and traditional financial institutions. Some of the most prominent banks that use open banking APIs in their products are JPMorgan Chase, BBVA, and Santander. Fintech businesses providing necessary infrastructure and services, such as Plaid, Tink, and Yodlee, are also leaders in innovation. As competition becomes more intense, collaboration between banks and fintech's is increasingly influencing industry growth.
SkyQuest's ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, the fast-growing global open banking market is driven by government legislations that have obligated financial institutions to exchange data over APIs and increasingly in-demand smooth digital banking experience by consumers. The industry was taken over in Europe with such programs as PSD2, whereas North America significantly grew due to interest in new digital services and partnering in fintech. The industry is expanding even as there are integration problems and data protection with the challenges. The more advancement in AI and machine learning boosts creativity and personalization, hence the openness in banking will expand even further, making it provide even safer, effective, and customer-centric financial solutions in the future as more banks and fintech will start collaborating with each other.
Report Metric | Details |
---|---|
Market size value in 2023 | USD 20.5 Billion |
Market size value in 2032 | USD 173.21 Billion |
Growth Rate | 26.8% |
Base year | 2024 |
Forecast period | 2025-2032 |
Forecast Unit (Value) | USD Billion |
Segments covered |
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Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
Companies covered |
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Table Of Content
Executive Summary
Market overview
Parent Market Analysis
Market overview
Market size
KEY MARKET INSIGHTS
COVID IMPACT
MARKET DYNAMICS & OUTLOOK
Market Size by Region
KEY COMPANY PROFILES
Methodology
For the Open Banking Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Open Banking Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
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Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Open Banking Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Open Banking Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
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