The open banking industry is likely to gain traction as more open banking solutions are adopted across the financial services, healthcare, retail, insurance, and education industries. In addition, the growing use of digital payments and mobile wallets, as well as increased consumer awareness of open banking, will drive market growth. However, a rise in incidents of online fraud and data insecurity is projected to limit the development of the open banking market. On the contrary, increasing collaboration between financial service providers and traditional banking with FinTech is expected to propel the market forward.
Open banking electronically shares financial details with third-party or independent financial service providers. The technology provides a secure network for parties to share financial information, making it easier for consumers to compare account details and other banking services. In addition, through online accounting, open banking saves time for small businesses and enables fraud detection organizations to monitor customer accounts and spot problems.
As per SkyQuest’s global research, financial transaction volume and value nearly doubled during 2022 compared to previous years, with an 86% increase in volume and a 73% increase in value in the third quarter of 2022.
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App Segment to Witness Significant Traction owing to Its Quick and Secure Transaction Feature
Based on SkyQuest’s market analysis, the app segment is in a dominant position with a 31% revenue share in 2022 and is anticipated to take this lead to reach 38% by 2025. Increasing internet penetration globally and acceptability for online transactions are driving significant growth for the segment. In addition, the growing user base of numerous transaction apps, such as Google Pay, PayPal, PhonePay, CRED, Zelle, and many others, which have made purchasing and selling easier with just one click, is predicted to push the open banking market growth.
North America, followed by Europe, has dominated the open banking market. Such a trend is expected to continue due to the growing consumer demand for security in online transactions, government directives compelling banks to develop APIs, and many industry players in this region that could boost revenue growth.
The primary objective of the research report is to impart authentic industry information and help new market entrants and existing players to witness organic growth in their target markets. In addition, the research report needs to be viewed as a crucial source of industry insights and direction for market participants because it features vital statistics, facts, and reliable growth strategies.
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The Payment Segment to Dominate the Open Banking Market under Financial Services Category
The payments segment has witnessed massive traction in the last few years owing to the increased use of online platforms for payment transactions. As per SkyQuest’s insights, the payment segment accounted for 42% market share in 2022 and is expected to cross 51% shareholding by 2028. Making payments via debit cards, credit cards, online payments, and other methods has become a common trend in developed and developing regions. Other factors influencing market expansion include improved internet accessibility around the world. The digital payment service is rapidly progressing due to the development of new payment methods, expanded e-commerce, enhanced internet access, and the deployment of new technology.
Asia Pacific emerges as one of the fastest-growing regional markets for open banking. The increased emphasis on digitalizing financial services and growing awareness of the benefits of Open Banking can be credited to such fantastic growth. Another factor driving market expansion is the rise in investments from banks investing in utilizing open application programming interface (API) management platforms.
The research includes an in-depth analysis of the open banking market, current trends, and future projections to highlight potential investment opportunities. In addition, the study provides information and data about the global market, which is segmented into regions, sub-regions, and nations. The market analysis by region and segment helps to identify the higher-performing segments and other segments with low growth rates.
Key Developments in Open Banking Market
- Salt Edge, a Canadian provider of Open Banking solutions, has announced its expansion into the Hashemite Kingdom sector, where it will offer its services to banks and financial institutions. Local banks and electronic money institutions are now permitted to give their clients approved third parties (TPPs), along with open and secure access to customer data, as a result of this extension. The task can accomplish through an application programming interface (API). Jordan’s financial institutions must create the technology required to become regulatory Open Banking compliant by the end of 2023.
- TCS, an Indian global corporate conglomerate, has teamed with ABN Amro, a Dutch bank, to aid in its digital transformation. ABN Amro desired to follow the most recent European legislation, the Payment Services Directive (PSD2). ABN Amro is considering supplying more useful application programming interfaces (APIs) and utilizing those of others in addition to PSD2 compliance. The goal was to construct a cloud-based Open Banking platform to expedite, create experiences outside of banking, experiment with new business models, and collaboratively reinvent finance.
- Mastercard has teamed upSWOT, a white-label integrated financial platform based in the United States, to add data for small businesses to upSWOT’s platform. The Mastercard Open Banking platform, whose services are offered by its subsidiary, Finicity, enables this action. As a result, UpSWOT’s platform now allows small business customers to connect authenticated financial data to 200 API-enabled apps, thanks to the addition of Open Banking functionality.
- BigCommerce, a US-based eCommerce startup, has teamed with the account-to-account payments platform Vyne to deliver A2A payments to their online customers. The collaboration is BigCommerce’s first in the Open Banking industry. Its goal is to provide merchants, consumers, and users with the ability to accept real-time payments and refunds while saving up to 80% on each transaction.
The research report on the open banking market includes in-depth analyses of the global competition and features profiles of the leading participants operating in the industry. In addition, key insights are presented in the report with various strategic developments, significant collaborations, new product pipelines, global events, and other crucial data that helps businesses plan the future roadmap for competing in the market. Finally, the development strategies used by the major market participants are listed in the research report to comprehend the market’s competitive landscape.
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