What is Open Banking
Open banking revolutionizes the banking industry by promoting secure interoperability by providing authorized access to banking transactions and data by third-party payment service providers and other financial institutions.
This access is made possible through application programming interfaces (APIs). With the ongoing evolution of the global economy, open banking is gaining momentum as it enables faster and more secure transactions on a worldwide scale. Additionally, it empowers consumers by providing them with increased flexibility in managing their finances through the utilization of innovative third-party solutions.
Millennials Driving Growth in Advanced Investment and Payments Segments
The growing demand among millennials for effective financial management is expected to be a key driver for the growth of the investment segment. As millennials seek more efficient ways to manage their finances, there is a shift from traditional investment methods to advanced investment solutions. This transition presents lucrative opportunities for the segment, as it aligns with the changing preferences and needs of the millennial demographic. Furthermore, the increasing adoption of AI-enabled platforms that utilize algorithms and analytics to suggest personalized investment options is expected to fuel the segment's growth, catering to the evolving demands of tech-savvy investors.
In parallel, the payments segment is poised to experience rapid growth during the forecast period. This growth is attributed to the increased internet penetration worldwide and the surge in online payment platforms' utilization. These developments have created opportunities for banks to gain a competitive edge by collaborating or partnering with platform providers, thus strengthening their market position.
The Rise of On-Premise Open Banking
In 2022, the open banking market witnessed a remarkable dominance of the on-premise segment, capturing more than 52.0% of the global revenue. This distinctive approach of on-premise Open Banking empowers customers with effortless accessibility, revolutionizing how their needs are catered to. The segment's exponential growth can be attributed to another critical factor - banking and financial institutions offering their APIs, empowering third parties and banks to provide cutting-edge services. Moreover, the emergence of a platform for open banking applications encourages users to engage with their financial data through unconventional means, fostering a unique and dynamic customer experience.
Conclusion
The open banking market continues to reshape the financial landscape, offering unparalleled opportunities for innovation, efficiency, and enhanced customer experiences. Through APIs, open banking enables secure and authorized access to banking transactions and data by third-party providers, driving faster and more secure global transactions.
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.
