Global Open Banking Market Overview:
Open Banking Market Size was estimated at 34.87 (USD Billion) in 2022. The Open Banking Market is expected to grow from 46.41 (USD Billion) in 2023 to 609.1 (USD Billion) by 2032. The Open Banking Market CAGR (growth rate) is expected to be around 33.12% during the forecast period (2024 - 2032).
Key Open Banking Market Trends Highlighted
Important market trends in the Open Banking space include the increasing adoption of Application Programming Interfaces (APIs) by banks and other financial institutions, the rise of fintech companies, and the growing demand for personalized financial services.
Market requirements for this sector revolve around the need for secure and standardized data-sharing mechanisms, the development of innovative use cases and applications, and the establishment of clear regulatory frameworks to facilitate its growth.
Key drivers for the Open Banking market include the increasing demand for transparency and control over financial data, the proliferation of digital banking channels, and the growing regulatory momentum.
Opportunities in the market lie in the development of new products and services that leverage open banking capabilities, such as personalized financial management tools and automated financial processes.
Recent trends in the Open Banking market include the emergence of Open Finance, which extends the concept of open banking by allowing the sharing of data from non-banking financial institutions, increased collaboration between banks and fintech companies, and the growing adoption of artificial intelligence and machine learning to enhance the customer experience.
Market requirements for Open Banking are expected to evolve continuously as it matures, necessitating ongoing innovation and adaptation to meet the changing needs of the industry and consumers.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Open Banking Market Drivers
Increased Adoption of Digital Banking
One of the main drivers of the Open Banking Market is the increasing adoption of digital banking. In the modern world, digital banking has become highly popular owing to the convenience and ease through which it can be employed, some of which are harnessed from these tools.
Customers are now able to access and manage their finances by using the various online and mobile platforms developed for this purpose.
The more the number of customers who are using digital platforms to manage their finances, the higher the demand for open banking services, which facilitate the sharing of financial information by customers with third parties offering these services.
Customers that use open banking services also stand to get more competitive deals on loans, mortgages and other financial products, in addition to efficient management of finances. Since the number of people who are relying on digital banking is expected to increase, the demand for open banking services is also expected to increase.
Growing Demand for Data-Driven Insights
Another major driver of the Open Banking Market is the increasing demand for data-driven insights. Businesses are using data to make better decisions on their products, services, and marketing campaigns.
Open banking services can give businesses valuable data on their customers’ financial behaviors. This data can be used to design new products and services, target marketing campaigns better, and improve customer service.
So, as the demand for data-driven insights continues to increase, open banking services will be sought after more.
Government Regulations
Government regulations are also playing a role in the growth of the Open Banking Market. In recent years, several governments have introduced regulations that require banks to share their customers' financial data with third-party providers.
These regulations are designed to promote competition and innovation in the financial services industry. As government regulations continue to evolve, the demand for open banking services is expected to increase as well.
Open Banking Market Segment Insights:
Open Banking Market Transaction Type Insights
Open Banking Market offers assessment for several segments, such as Transaction Type. In 2023, the segment of Payments accounted for the largest market share. It is expected to continue this development over the stipulated period.
The rise in this segment is associated with the continuing growth in the use of digital payments, such as mobile wallets and online banking. Lending is another major segment that is also anticipated to develop at a high pace in the years to come. The availability and use of online lending services, including peer-to-peer and crowdfunding options, are increasing, leading to this growth.
Data Aggregation and Wealth Management are two other important segments or first, the respective rate should remain relatively high in the future. The rise of these segments is explained by the growth of demand for financial management and data analysis and advice.
In 2023, the revenue from Payments was estimated at $12.5 billion, which is projected to rise to $35.6 billion in 2032 with a CAGR of 12.4 %. The next significant segment, Lending, is expected to grow from $7.2 billion in 2023 to $20.1 billion in 2032, which is a CAGR of 11.7 %.
Data Aggregation is expected to reach $15.4 billion in 2032 from $4.3 billion in 2023 and develop at a CAGR of 15.6 %. Wealth Management would also grow from $2.7 billion in 2023 to $7.6 billion in 2032, which is a CAGR of 13.4 %. Other segments offering services, such as insurance, would register a CAGR of 10.2 %.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Open Banking Market Data Type Insights
Data Type Segment Insights and Overview The data type segment plays a crucial role in the Open Banking Market, enabling the exchange of various types of financial data between financial institutions and third-party providers (TPPs).
This growth is driven by the increasing adoption of open banking APIs and the growing demand for data-driven financial services. Among the different data types, 'Account Information' holds a significant share of the market, providing TPPs with real-time access to customer account balances, transactions, and other relevant information.
'Transaction Data' is another important data type, enabling TPPs to analyze customer spending patterns and provide personalized financial advice. 'Customer Preference Data' is gaining traction as it allows TPPs to tailor their offerings based on customer preferences and behaviors.
'Eligibility Data' is crucial for credit scoring and lending decisions, enabling TPPs to assess customer creditworthiness and offer tailored financial products. Other data types, such as 'Merchant Data' and 'KYC Data,' also contribute to the growth of the Open Banking Market by providing valuable insights into customer behavior and risk management.
Open Banking Market Application Type Insights
The Open Banking Market is segmented by Application Type into Personal Finance Management (PFM), Payment Services, Lending Platforms, Data Analytics and Business Intelligence, and Others. The PFM segment is expected to hold the largest market share in 2023, accounting for over 35% of the Open Banking Market revenue.
This is due to the increasing adoption of PFM tools by consumers to manage their finances more effectively. The Payment Services segment is expected to grow at the highest CAGR during the forecast period, owing to the rising popularity of digital payments and the growing adoption of open banking APIs by payment providers.
The Lending Platforms segment is also expected to witness significant growth, as open banking enables lenders to access real-time financial data and make more informed lending decisions.
The Data Analytics and Business Intelligence segment is expected to play a crucial role in the growth of the Open Banking Market, as it provides businesses with valuable insights into customer behavior and market trends.
Open Banking Market Deployment Model Insights
The Open Banking Market is segmented based on deployment model into cloud-based, on-premises, and hybrid. Among these, the cloud-based segment is expected to hold the largest market share in 2023 and is projected to continue its dominance throughout the forecast period.
The growth of the cloud-based segment can be attributed to the increasing adoption of cloud computing services by financial institutions. Cloud-based deployment offers several benefits, such as scalability, flexibility, and cost-effectiveness, making it an attractive option for banks and other financial institutions.
The on-premises segment is expected to witness steady growth during the forecast period. On-premises deployment provides greater control and security over data, which is a key consideration for many financial institutions.
The hybrid segment is expected to gain traction in the coming years as it offers a combination of the benefits of both cloud-based and on-premises deployments.
Open Banking Market Product Offering Insights
Product offerings within the Open Banking Market are expected to generate substantial revenue in the coming years. Among the key offerings, Open Banking APIs are projected to account for a significant share of the market, enabling seamless data sharing and connectivity between financial institutions and third-party providers.
Data Aggregation Services are also gaining traction, providing consolidated financial data to users for better financial management. Payment Processing Solutions, including real-time payments and cross-border transactions, are expected to drive growth in the market.
Lending Solutions, offering personalized and accessible lending options through open banking platforms, are poised for expansion. Other offerings, such as account information services, regulatory compliance solutions, and advisory services, contribute to the diverse product landscape of the Open Banking Market.
Open Banking Market Regional Insights
The regional analysis of the Open Banking Market comprises North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.
North America is expected to remain the dominant region in the Open Banking Market, accounting for a significant share of the global market.
Europe is expected to be the second-largest region in the Open Banking Market, followed by Asia-Pacific. South America, the Middle East, and Africa are expected to experience significant growth in the Open Banking Market in the coming years.
The growth of the Open Banking Market in these regions is attributed to the increasing adoption of digital banking services, the rising popularity of mobile payments, and the growing awareness of open banking among consumers.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Open Banking Market Key Players and Competitive Insights:
Major players in the Open Banking Market are constantly vying for market dominance, driving Open Banking Market development and shaping the competitive landscape. Leading Open Banking Market players leverage strategic partnerships, acquisitions, and innovative solutions to gain a competitive edge.
Collaboration and consolidation are prevalent, with incumbents and new entrants forming alliances to expand their offerings and reach. The Open Banking Market Competitive Landscape is characterized by intense competition and a focus on delivering enhanced customer experiences.
A leading company in the Open Banking Market is Plaid, known for its advanced technology and extensive partner network. Plaid's platform enables seamless data sharing and connectivity between financial institutions and fintech applications.
By partnering with over 13,000 financial institutions and powering over 6,000 apps, Plaid has established itself as a key player in the Open Banking ecosystem.
One of Plaid's major competitors is Stripe, a global technology company that provides a suite of payment and financial services.
Stripe's open banking solutions allow businesses to connect with financial institutions, access customer data, and initiate payments securely. Stripe's focus on developer-friendly tools and its international presence makes it a formidable competitor in the Open Banking Market.
Key Companies in the Open Banking Market Include:
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Token
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cloudHQ
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Finastra
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Currencycloud
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Tink
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Envestnet | Yodlee
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Yapily
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Flinks
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Plaid
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Truelayer
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OpenWay
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Credit Kudos
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Salt Edge
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i2c
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Nordigen
Open Banking Market Developments
Key market drivers include the rising adoption of digital banking, increasing demand for personalized financial services, and growing awareness of open banking benefits.
Recent developments include the launch of new open banking platforms, partnerships between banks and fintechs, and the introduction of regulations to enhance data security and privacy. Major players in the market include Plaid, Tink, TrueLayer, and Yapily.
The market is expected to witness significant growth in the Asia-Pacific region due to the increasing adoption of digital banking and supportive government initiatives.
Open Banking Market Segmentation Insights
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Open Banking Market Transaction Type Outlook
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Payments
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Lending
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Data Aggregation
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Wealth Management
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Other (specify)
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Open Banking Market Data Type Outlook
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Account Information
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Transaction Data
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Customer Preference Data
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Eligibility Data
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Other (specify)
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Open Banking Market Application Type Outlook
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Open Banking Market Deployment Model Outlook
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Cloud-based
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On-premises
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Hybrid
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Open Banking Market Product Offering Outlook
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Open Banking Market Regional Outlook
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North America
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Europe
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South America
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Asia-Pacific
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Middle East and Africa
| Report Attribute/Metric |
Details |
| Market Size 2022 |
34.87(USD Billion) |
| Market Size 2023 |
46.41(USD Billion) |
| Market Size 2032 |
609.1(USD Billion) |
| Compound Annual Growth Rate (CAGR) |
33.12% (2024 - 2032) |
| Report Coverage |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Base Year |
2023 |
| Market Forecast Period |
2024 - 2032 |
| Historical Data |
2019 - 2023 |
| Market Forecast Units |
USD Billion |
| Key Companies Profiled |
Token, cloudHQ, Finastra, Currencycloud, Tink, Envestnet | Yodlee, Yapily, Flinks, Plaid, Truelayer, OpenWay, Credit Kudos, Salt Edge, i2c, Nordigen |
| Segments Covered |
Transaction Type, Data Type, Application Type, Deployment Model, Product Offering, Regional |
| Key Market Opportunities |
PSD2 compliance. New revenue streams. Increased customer engagement. Reduced operating costs. Enhanced data analytics. |
| Key Market Dynamics |
Regulatory pressures. Growing API adoption. Data monetization opportunities. Collaboration between banks and fintech. Customer demand for personalized services. |
| Countries Covered |
North America, Europe, APAC, South America, MEA |
Frequently Asked Questions (FAQ) :
The Open Banking Market is expected to reach a valuation of USD 46.41 billion in 2023.
The Open Banking Market is projected to register a CAGR of 33.12% from 2024 to 2032.
The key regions driving the growth of the Open Banking Market include North America, Europe, Asia-Pacific, and the Rest of the World.
The major applications of Open Banking include payments, lending, personal financial management, and business banking.
The key competitors in the Open Banking Market include Plaid, Stripe, Marqeta, and Tink.
The key trends shaping the Open Banking Market include the rise of embedded finance, the increasing adoption of cloud-based solutions, and the growing demand for data-driven insights.
The challenges facing the Open Banking Market include data security and privacy concerns, regulatory compliance, and the need for interoperability between different platforms.
The opportunities for growth in the Open Banking Market include the expansion into new markets, the development of new products and services, and the increasing adoption of Open Banking by businesses.
Open Banking is disrupting the traditional banking industry by creating new opportunities for competition and innovation. It is also leading to the development of new products and services that are tailored to the needs of consumers.
The outlook for the Open Banking Market is positive. The market is expected to continue to grow at a rapid pace, driven by the increasing adoption of Open Banking by businesses and consumers.
