What is Open API Banking?
Open banking involves the utilization of application programming interfaces (APIs) to facilitate the exchange of financial information and services with external entities. These third-party entities often offer technological solutions, services, or applications to the customers of a bank, leveraging the shared financial data and services.
The data shared typically includes statements and transaction records specific to the bank's customers. However, it is essential to note that this data is not openly accessible; it is only shared upon the explicit request and consent of the customer. Open banking encompasses the necessary technological infrastructure and legal frameworks to enable secure and consent-based sharing of financial information.
The Growth Drivers of Open Banking API Market
The open banking API market is poised for significant growth, fueled by the enhanced overall consumer engagement it offers. This innovative approach provides consumers with seamless accessibility, meeting their evolving demands in a simplified manner. Banking and financial institutions have introduced their own application programming interfaces (APIs), enabling third parties and banks to offer inventive services. This integration of open banking APIs is expected to drive growth in financial revenue as it paves the way for new revenue streams and expanded customer offerings.
Furthermore, open banking application platforms are revolutionizing the way consumers engage with their financial data. Recognizing the potential of open banking, banks are prioritizing the improvement of services to enhance consumer experience and deepen consumer engagement. By leveraging open banking APIs, financial institutions are able to deliver personalized and innovative solutions, fostering stronger relationships with customers and creating a more engaging financial ecosystem.
Market Share and Key Players in the Open Banking API Industry
In 2020, the banks and capital segment dominated the open banking market, capturing most of the market share. This can be attributed to the fact that banking and capital markets leverage available banking services to gather customer demographic information, expand their reach, and acquire new customers. As open banking is a relatively new concept for these sectors, they have embraced it to tap into its potential benefits.
Looking at the regional perspective, Europe held the largest market share in the open banking market in 2020. This growth can be attributed to the increasing adoption of available banking platforms and the growing emphasis on enhancing online payment security. Additionally, government directives mandating banks to open APIs have further stimulated regional market growth.
Key players in the open banking market, including Banco Bilbao Vizcaya Argentaria S.A., Credit Agricole, Deposit Solutions, Finastra, Jack Henry & Associates, Inc., Nordigen Solutions, Revolut Ltd., Societe Generale, Tink (Visa Inc.), and Yapily Ltd., have implemented various strategies to enhance their market presence and strengthen their positions in the open banking industry.
Conclusion
Open banking has emerged as a transformative force in the financial industry, enabling the secure exchange of financial information and services through APIs. The adoption of innovative apps and services, coupled with increased customer engagement and demand for personalized banking experiences, are driving the growth of the open banking market.
Author's Detail
Supriya R Ghadge, LinkedIn
I am working as a Senior Research Analyst, mainly involved in conducting market research in the Information and Communication, and Technology domain. Skilled in Secondary Research, Primary Research, Data Analytics Research approaches with extensive experience providing first-class results. Highly focused, have analytical skills, and synergetic with positive energizers. Meets job demands and deadlines through diligent work-ethic and dedication to quality. Works with clients to determine requirements and provide excellent service.
Author's Detail:
Supriya Jagtap /
LinkedIn
I am working as a Senior Research Analyst, mainly involved in conducting market research in the Information and Communication, and Technology domain. Skilled in Secondary Research, Primary Research, Data Analytics Research approaches with extensive experience providing first-class results. Highly focused, have analytical skills, and synergetic with positive energizers. Meets job demands and deadlines through diligent work-ethic and dedication to quality. Works with clients to determine requirements and provide excellent service.
