Open Banking Solutions Market by Offering (Solutions, Services), Application (Payment, Banking, Digital Lending), Digital Channel (Mobile, Web), Deployment Model, End User (Account Providers, Third-party Providers) and Region - Global Forecast to 2028
Open Banking Solutions Market - Analysis, Industry Size & Forecast
The Open Banking Solutions Market size was valued at USD 5.5 billion in 2023 and is expected to grow at a CAGR of 16.0% from 2023 to 2028. The revenue forecast for 2028 is projected to reach $11.7 billion. The base year for estimation is 2022, and the historical data spans from 2023 to 2028.
The impact of the recession (before, during, and after the recession) on the market is covered throughout the report. Banks and financial institutions are embracing digital transformation initiatives, adopting open banking to enhance customer experience and drive operational efficiency. Open banking enables international trade and transactions, addressing the requirements of both businesses and individuals (individual users) in the diverse and growing economies of the region.
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Recession Impact on the Global Open Banking Solutions Market
A recession can significantly impact the Open banking solutions market across organizations, industry verticals, and regions. Businesses may delay investments in these technologies as they prioritize cost-cutting over innovation. Startups in the field may struggle to secure funding as investors become more risk-averse. The demand for open banking solutions may increase during a recession as businesses seek more efficient financial management tools. However, the overall market growth might slow down due to reduced investment and consumer spending. Fintech companies offering open banking solutions may face challenges acquiring funding and retaining customers. Still, their services could be increasingly sought after by businesses looking to optimize their financial operations in challenging economic times. Government stimulus and investments in technology development can also help mitigate the recession's impact. In the end, the extent of the effect varies by region, industry, and the severity of the economic downturn.
Open Banking Solutions Market Dynamics
Drivers: There is a growing need to meet the compliance requirements of new data laws and regulations
Several Financial institutions must make significant changes to their business processes to meet new data privacy and regulation policies, such as the Second Payment Services Directive (PSD2) and open banking APIs. PSD2 enables banks to explore new business opportunities and transform digitally. Furthermore, PSD2 regulation enables third parties to access customer information to provide secured payment services. These regulations allow financial institutions to offer their customers innovative and competitive products and services in an open and secure environment. The regulations also provide a frictionless customer experience.
Restraints: Lack of digital literacy in emerging countries
Digital literacy is still lacking in many emerging nations, making it difficult for online and mobile payments to be widely accepted. This adversely affects the market expansion of Open Banking platforms and solutions. A wide range of abilities, including reading and comprehending technical information, are included in digital literacy. These abilities enable people to operate and utilize digital devices. Because most African nations have poor digital literacy rates, people cannot fully use the promise of digital technologies. Because there aren't many digital transactions, technology companies are likewise reluctant to make investments. Therefore, it is anticipated that the market for open banking solutions will grow more slowly in emerging nations due to low levels of digital literacy.
Opportunities: State-of-the-art innovation and improved personalization
Open banking unveils vast amounts (s) of financial data that can be leveraged to drive innovation and personalize financial services. By accessing real-time data from multiple sources, including bank accounts, credit cards, investments, financial institutions, and TPPs, they can develop innovative solutions tailored to individual consumer needs. These solutions may/can include personalized budgeting tools, automated savings plans, and customized investment recommendations. By harnessing open banking APIs, companies can offer more relevant and targeted financial products and services, enhancing the overall customer experience and increasing engagement and loyalty.
Challenges: Technical glitch leading to losses
Due to their reliance on digital platforms, banks are vulnerable to significant losses in the event of system failure or coding errors. Millions of dollars could be lost by a bank due to a single technological problem that shuts it down for the day. It can also create panic for bank customers who cannot make payments or conduct transactions when the site is down. A significant chunk of consumers now use a mobile banking app. So, it is vital not just for banks to have their online platforms running smoothly but also for their mobile apps. A loss of funds or data due to a crash can be very threatening for bank customers.
Open Banking Solutions Market Ecosystem
Based on the offering segment, Solutions will hold a larger market share in the Open banking solutions market during the forecast period.
Open Banking solutions include innovative tools and technologies designed to revolutionize the financial services industry by enabling secure data sharing, fostering collaboration between financial institutions, third-party providers, and consumers, and driving digital transformation. Payment initiation solutions allow businesses and consumers to initiate payments directly from their bank accounts, bypassing traditional payment methods and facilitating faster, more convenient transactions. Account information solutions aggregate and analyze comprehensive financial data from multiple sources, providing businesses with valuable insights for personalized marketing, risk assessment, and product development. API management solutions play a crucial role in facilitating seamless integration between different systems and enabling the development of innovative applications and services on top of existing platforms through open APIs. Identity verification and authentication solutions ensure secure access to financial data and services, leveraging advanced technologies to combat identity theft and fraud.
Based on solutions, the API management segment will record the highest CAGR in the Open banking solutions market during the forecast period.
API management solutions facilitate seamless integration, innovation, and collaboration across the financial ecosystem. As the gatekeeper between disparate systems and applications, API management solutions orchestrate data and transactions with precision and efficiency. These solutions provide developers, financial institutions, and third-party providers with standardized interfaces and protocols for accessing and exchanging financial data securely and transparently. API management solutions ensure compliance with regulatory requirements and protect sensitive information from unauthorized access or misuse by offering robust security measures, rate limiting, and access controls. Moreover, API management solutions foster innovation by enabling the rapid development and deployment of new financial products and services through open APIs, driving forward a future where interoperability and connectivity redefine the economic landscape.
Europe will hold the largest Open banking solutions market share during the forecast period.
The adoption of open banking solutions in the European region has gained considerable momentum, positioning the region at the forefront of the field/market. According to experts, Europe is expected to have the highest adoption rate of Open Banking solutions and associated services compared to other regions. This is due to the rising interest of European households in innovative, advanced technologies and the increasing investment of European companies in advanced technologies such as data integration, data visualization, middleware, API management, and blockchain, incorporated into/run by Open Banking solutions vendors and service providers.
Despite a continually evolving regulatory environment, Europe has witnessed significant economic growth in recent years. This growth can be attributed to the increasing expectations of businesses in the region to improve efficiency, save time, and reduce operating costs. As a result, several major US-based Open banking solutions market companies have expanded their operations in Europe, built up a solid clientele base, and established an overseas presence. Regional technology providers collaborate with global Open banking solutions market providers to stay competitive, retain existing customers, and attract new ones.
Key market players
The Open banking solutions market is dominated both by established companies as well as startups such as Plaid (US), Envestnet (US), MX Technologies (US), Finicity (US), Tink (Sweden), Worldline (France), Trustly (Sweden), Axway Software (US), Volt.io (UK), Temenos (Switzerland). These vendors have a large customer base, a strong geographic footprint, and organized distribution channels. They incorporate organic and inorganic growth strategies, including product launches, deals, and business expansions, boosting revenue generation.
The study includes an in-depth competitive analysis of these critical Open banking solutions market players with their company profiles, recent developments, and key market strategies.
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- Latest News, Updates & Trend analysis
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Report Metrics |
Details |
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Market size available for years |
2019-2028 |
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Base year considered |
2022 |
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Forecast period |
2023–2028 |
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Forecast units |
Value (USD Billion) |
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Segments Covered |
Offering, Solutions, Services, Application, Digital channel, Deployment Model, and End users |
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Regions covered |
North America, Europe, Asia Pacific, Middle East & Africa, and Latin America |
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Companies covered |
Plaid (US), Envestnet (US), MX technologies (US), Finicity (US), Tink (Sweden), Worldline (France), Trustly (Sweden), Axway software (US), Volt.io (UK), Temenos (Switzerland), Fabrick (Italy), Intuit (US), ndgit (Germany), Akana (US), Yapily (UK), Salt Edge (Canada), Token.io (Germany), Fiorano (US), TrueLayer (UK), Bud Financial (UK), OpenPayd (UK), Finastra (UK), Google (US), Sopra Banking software (France), BBVA (Spain) |
This research report categorizes the Open banking solutions market to forecast revenue and analyze trends in each of the following submarkets:
Based on Offering:
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Solutions
- Payment initiation
- Account information
- Identity verification & authentication
- API management
- Other Solutions
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Services
- Professional services
- Managed services
Based on Application:
- Payment
- Banking
- Digital Lending
- Wealth Management
- Other Applications
Based on Deployment model:
- On-premises
- Cloud
Based on Digital channel:
- Web portals
- Mobile apps
Based on End users:
- Third-party providers (TPPs)
- Account providers
Based on Region:
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North America
- US
- Canada
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Europe
- UK
- Germany
- France
- Italy
- Rest of Europe
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Asia Pacific
- China
- Japan
- India
- Rest of Asia Pacific
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Middle East & Africa
- GCC
- South Africa
- Rest of the Middle East & Africa
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Latin America
- Brazil
- Mexico
- Rest of Latin America
Recent Developments
- In February 2024, MX Technologies partnered with Trustly, intending to integrate MX's data enhancement services into Trustly's Open Banking product suite, thereby enriching the payment experiences of 8,300+ international merchants and their consumers who utilize Trustly's 'Pay with Bank' method. Using its proficiency in open finance APIs, Trustly will assist businesses in maximizing the potential of their financial data. Merchants can delve deeper into consumer behaviors by refining and categorizing transaction data, obtaining more accurate insights. This service empowers merchants to deliver personalized marketing promotions and loyalty programs, enriching the consumer journey and nurturing stronger bonds between merchants and their clientele.
- In January 2024, Risk Signals was launched by Tink, which conducts real-time risk checks during the payment process. Risk Signals provides a quick assessment of transactions in seconds while the payer progresses through the payment process, resulting in less disruption to the user experience. Risk Signals formulates a suite of demonstrated risk checks for each bank and market based on Tink's pan-European bank connectivity. Risk Signals' key features are live balances for real-time verification of a user's ability to pay, transaction history to assess fraud risk, and velocity checks to mark suspicious transaction activities.
- In October 2023, Plaid entered into a deal with Fiserv to enable secure and reliable data sharing through APIs while addressing growing consumer demand to access their financial information according to their suitable time, location, and manner. With this deal, consumers who bank with nearly 3,000 bank and credit union clients hosted by Fiserv will now have secure, credential-less API-based connectivity to more than 8,000 applications and services on the Plaid network via Fiserv's AllData Connect, allowing consumers to share their financial information with the third-party financial apps and services of their choice.
- In October 2023, Envestnet launched its embedded investment solution to provide a digitalized process for banks, credit unions, and financial advisors that will offer investing solutions within their (the banks, credit union entities) own apps and websites to customers within their existing banking experience. The service, consisting of diversified portfolios invested in exchange-traded funds (ETFs) and optional thematic stocks, enables financial institutions to retain deposits within their ecosystem and serve smaller account sizes digitally.
- In June 2023, Financial institutions and fintech firms can now exchange vital fraud intelligence across Plaid thanks to the launch of Beacon by Plaid, a cooperative anti-fraud network.
Frequently Asked Questions (FAQ):
What is the projected market value of the Open Banking Solutions Market?
The global Open Banking solutions market is expected to grow from USD 5.5 billion in 2023 to USD 11.7 billion by 2028 at a Compound Annual Growth Rate (CAGR) of 16.0% during the forecast period.
Which region has the highest CAGR in the Open Banking Solutions Market?
The Middle East & Africa region has the highest Open Banking Solutions Market CAGR.
Which offering holds a more significant market share during the forecast period?
The solutions segment is forecasted to hold a larger market share in the Open Banking Solutions Market.
Which are the major vendors in the Open Banking Solutions Market?
Plaid, Envestnet, Tink, MX Technologies, and Finicity are prominent Open Banking Solutions Market vendors.
What are some of the drivers in the Open Banking Solutions Market?
Collaboration between banks, fintech firms, and technology providers presents opportunities for global innovation and expansion of open banking solutions. .
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The study covered four main actions to estimate the current market size of the Open Banking solutions market. We conducted significant secondary research to gather data on the market, the competing market, and the parent market. The following stage involved conducting primary research to confirm these conclusions' hypotheses and sizing with industry experts throughout the value chain. A combination of top-down and bottom-up methods was used to assess the overall market size. We then estimated the market sizes of the leading Open Banking solutions segments using the market breakup and data triangulation techniques.
Secondary Research
A wide range of secondary sources, directories, and databases were employed in this research project, including product demos, vendor data sheets, D&B Hoovers, DiscoverOrg, Factiva, Vendor Surveys, Global Findex database, Association for Financial Technology (AFT), and Company Websites/Annual Reports/SEC Filings. We referred to sources to locate and gather important data for this technical, commercial, and market-focused analysis of the Open Banking solutions market.
Primary Research
Several industry experts from the core and related industries and providers of preferred software developers, distributors, service providers, technology developers, alliances, and organisations connected to every link in the industry value chain were the primary sources of information. Key industry participants, subject-matter experts, C-level executives of major market players, and industry consultants were among the primary respondents with whom in-depth interviews were conducted to gather and validate crucial qualitative and quantitative data and evaluate the market's potential.
To obtain information, we conducted primary interviews on market statistics, the most recent trends that are upending the industry, newly implemented use cases, data on revenue generated by goods and services, market segmentation, market size estimations, market forecasts, and data triangulation. Understanding different technological developments, segmentation types, industry trends, and geographical areas was also aided by primary research. To understand the buyer's perspective on suppliers, open banking solution providers, and their current use cases, which would affect the overall Open Banking solutions market, demand-side stakeholders, such as Chief Executive Officers (CEOs), Chief Information Officers (CIOs), Chief Technology Officers (CTOs), Vice Presidents (VPs), and Chief Security Officers (CSOs), as well as the installation teams of governments/end users using Open Banking solutions, and digital initiatives project teams, were interviewed.
To know about the assumptions considered for the study, download the pdf brochure
Market Size Estimation
We employed top-down and bottom-up methodologies to estimate and forecast the Open Banking solutions market and other associated submarkets. Using the revenues and product offerings of the major market players, the bottom-up approach assisted in determining the overall market size. This research ascertained and validated the precise value of the total parent market size through data triangulation techniques and primary interview validation. Using percentage splits of the market segments, we were able to estimate the size of other specific markets using the overall market size via the top-down approach.
The bottom-up approach identified the trend of Open Banking solutions adoption among industry verticals in critical countries that contribute the most to the market. The adoption trend of Open Banking solutions and varying cases of use concerning their business segments were identified and extrapolated for cross-validation. We gave weightage to the use cases identified in different solution areas for the calculation. We prepared an exhaustive list of all vendors offering Open Banking solutions. Using annual reports, news releases, fundraising, investor presentations, paid databases, and primary interviews, we calculated the revenue contribution of each vendor in the market.. We evaluated each vendor based on its service offerings across verticals. To get the entire market size, we extrapolated the total revenue of all businesses. The market size and geographical penetration of each subsegment were examined and analysed. We determined the region split through primary and secondary sources based on these numbers.
The top-down approach prepared an exhaustive list of all vendors in the Open Banking solutions market. We estimated the revenue contribution of all vendors in the market through their annual reports, press releases, funding, investor presentations, paid databases, and primary interviews. We estimated the market size from revenues generated by vendors from different Open Banking solutions offerings. Using secondary and primary sources, we located additional vendors and the income produced by each service type, which we then aggregated to calculate the market size. Additionally, the procedure included a regional penetration analysis of the Open Banking solutions market. The investigation was utilized to ascertain and validate the precise values of the market sizes for Open Banking solutions and its sectors, using the data triangulation process and primary data validation. The main procedure to gather essential insights was conducting in-depth interviews with CEOs, CTOs, CIOs, VPs, directors, and marketing executives. To confirm, we further triangulated market numbers using the current MarketsandMarkets repository.
Open Banking solutions Market: Top-Down and Bottom-Up approaches
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Data Triangulation
The market was divided into several segments and subsegments using the previously described market size estimation procedures once the overall market size was determined. When required, market breakdown and data triangulation procedures were employed to complete the market engineering process and specify the exact figures for every market segment and subsegment. The data was triangulated by examining several variables and patterns from government entities' supply and demand sides.
Market Definition
Considering the views of various sources (Software AG company) and associations on Open Banking solutions, MarketsandMarkets defines Open Banking solutions as “a banking practice and regulatory framework that allows customers to grant third-party financial service providers access to their financial data held by traditional banks or financial institutions through secure Application Programming Interfaces (APIs). This sharing of data enables third-party developers to create innovative financial products and services, such as budgeting apps, payment solutions, investment platforms, and lending services, tailored to the individual needs and preferences of customers. Open Banking aims to promote competition, innovation, and transparency in the financial services industry, empowering customers with greater control over their financial data and fostering a more interconnected and dynamic ecosystem of financial services".
Key Stakeholders
- Banks and Financial Institutions
- Fintech Companies
- Investors
- Regulatory Bodies
- Technology Providers
- Third-Party Providers (TPPs)
- Government Agencies
- Industry Associations
- Consulting Firms
- Customers
Report Objectives
- To define, describe, and forecast the Open Banking Solutions market based on offering, application, digital channel, deployment model, end user, and region
- To offer comprehensive details regarding the primary variables impacting the market's growth (drivers, restraints, opportunities, and challenges)
- To determine the high-growth market sectors in order to assess the opportunities for stakeholders in the market
- To forecast the market size with respect to five main regions—North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America
- To analyze the subsegments of the market with respect to individual growth trends, prospects, and contributions to the overall market
- To profile the key players of the market and comprehensively analyze their market size and core competencies
- To track and analyze the competitive developments, such as product enhancements, product launches, acquisitions, partnerships, and collaborations, in the Open Banking Solutions market globally.
Available Customizations
With the given market data, MarketsandMarkets offers customizations per the company's specific needs. The following customization options are available for the report:
Product Analysis
- The product matrix provides a detailed comparison of the product portfolio of each company.
Geographic Analysis
- Further breakup of the Asia Pacific market into countries contributing 75% to the regional market size
- Further breakup of the North American market into countries contributing 75% to the regional market size
- Further breakup of the Latin American market into countries contributing 75% to the regional market size
- Further breakup of the Middle Eastern & African market into countries contributing 75% to the regional market size
- Further breakup of the European market into countries contributing 75% to the regional market size
Company Information
- Detailed analysis and profiling of additional market players (up to 5)
Growth opportunities and latent adjacency in Open Banking Solutions Market