USD 16.14 billion
Report ID: SQMIG40A2004 | Region: Global | Published Date: February, 2023 | Pages: 157 | Tables: 90 | Figures: 76
Global Open Banking Market size was valued at USD 16.14 billion in 2021 and is poised to grow from USD 20.47 billion in 2022 to USD 128.12 billion by 2030, growing at a CAGR of 26.8% in the forecast period (2023-2030).
The increase in popularity of online payment options has resulted in the expansion of the open banking market. The changing payment ecosystem, rising e-commerce platform use, progressing broadband connectivity, and rising application programming interface (API) acceptance are driving the market growth. To manage recurring billing, online services such Zelle, PayPal, and Venmo use payment gateway APIs; these APIs are frequently used in open financial transactions.
Additionally, it is expected that as technology progresses and big data analytics and artificial intelligence (AI) are becoming more prevalent, the use of open banking systems will rise. In the open banking industry, big data analytics are used to personalize the services and enhance the user experience, that is expected to bring in more customers. Additionally, open banking benefits from the whole value chain of the financial industry, including customers, enterprises, Fintechs, banks, and financial institutions. A customer in the financial services gets access to superior banking services and cutting-edge and personalized financial products thanks to the adoption of open banking across the sector because they have a number of options or service providers from which to select for their financial needs.
Moreover, the global open banking sector is expected to profit from lucrative growth opportunities given by the increasing investment in digital banking. For instance, the Arab National Bank (ANB), a financial institution in Saudi Arabia, integrated the open hybrid cloud platforms of Red Hat in December 2021 to support the growth of digital banking and open finance. ANB seeks to develop relationships with ecosystem partners in a more efficient and secure manner. ANB intended to accomplish this by using a microservices integration layer and APIs to create cloud-native applications and Banking-as-a-Service (BaaS) products on its Red Hat platform.
US Open Banking Market is poised to grow at a sustainable CAGR for the next forecast year.
Global Market Size
USD 16.14 billion
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Global Open Banking market is segmented on the basis of Services, Deployment, Distribution Channel, and region. By Services, the Open Banking Market is segmented into Banking & Capital Markets, Payments, Digital Currencies, Value Added Services. By Deployment, the Open Banking Market is segmented into Cloud, and On-premise. By Distribution Channel, the Open Banking Market is segmented into Bank Channels, App Markets, Distributors, and Aggregators. By region, the Open Banking Market is segmented into North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.
Open Banking Market Analysis by Services
In 2022, the market will be dominated by the banking & capital markets segment, and accounted for more than 45.0% of global revenue. The segment is expected to grow as a result of millennials' increasing desire for corporate finance tools. People's attention shifting from traditional investment methods to having to cut investment solutions is anticipated to open up profitable business chances for the market. The segment growth is expected to be driven by increasing use of advanced Ai platforms that may suggest investment options based on consumer needs by integrating algorithms and analytics. Over the forecast period, it is anticipated that the payments segment will grow the fastest. The growth's characteristics include an increase in internet usage globally and a surge in the use of multiple platforms for conducting online payments. By working with or partnering with such platform providers, banks had the opportunity to make the most of these developments and strengthen overall market position resulting in a positive outlook for the expansion of the segment.
Open Banking Market Analysis by Deployment
The on-premise segment dominated the open banking market in 2021 and represented for further than 52.0% of global revenue. Customers have easy access to the on-premise Open Banking, which provides a special way to better meet their needs. The fact that banks and other financial institutions utilize their own APIs, enabling third parties and banks should provide cutting-edge services, is another significant contributor to the segment's growth. A platform for open banking applications also invites users to participate in new financial data exchanges. Over the forecast period, the cloud segment is expected to grow at the fastest rate. Cloud deployment services enable the bank to gather an unprecedented amount of consumer data, analyze it, and offer tailored services where they are required. Additionally, cloud computing offers the highest security standards. Additionally, the cloud's scalability, flexibility, and real-time process technology are expected to open up new prospects for segment growth.
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North America dominated the global market. With a market share of over 20.7% during the forecast period, this region is expected to grow significantly. Growth in users of modern apps and services can be observed in North America. Additionally, increasing consumer interaction and fulfilling banking consumers' requirements help the open banking market develop.
Over the forecast period, Asia Pacific is anticipated to encounter the highest CAGR growth. Since more individuals are becoming aware of the advantages of open banking systems in nations like China, India, and Japan, the regional market is expected to grow. The rapid advancement of digital payment services in Asia Pacific is also expected to aid the growth of the market.
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Open Banking Market Drivers
Growing e-commerce platform
Increasing adoption of the open banking system
Open Banking Market Restraints
Rising frequency of cyberattacks and online frauds
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The preponderance of open financial companies is based in the fin-tech and banking. Government policies and regulations have a significant impact on how these businesses operate.
Open Banking Market Top Player’s Company Profiles
Nordic API Gateway
Open Banking Market Recent Developments
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The use of open banking systems is anticipated to rise as a result of technology's continuous modernization and the subsequent development in big data analytics and applications of artificial intelligence. Big data analytics are used to personalize the offerings and improve the user experience in the open banking sector, which is anticipated to lead to increased customer retention over the forecast period.
|Market size value in 2021||USD 16.14 billion|
|Market size value in 2030||USD 20.47 billion|
|Forecast Unit (Value)||USD Billion|
|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)|
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Parent Market Analysis
KEY MARKET INSIGHTS
MARKET DYNAMICS & OUTLOOK
Market Size by Region
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For the Global 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 Global 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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