Open Banking Market Size to Reach $43.15 Billion, Globally, by 2026 at 24.4% CAGR, Says Allied Market Research
Potential benefits of open banking, favorable government regulations, improved overall customer engagement with open banking APIs, and surge in adoption of new applications and services have boosted the growth of the global open banking market.
PORTLAND, Ore., Nov. 12, 2020 /PRNewswire/ -- Allied Market Research recently published a report, "Open Banking Market by Financial Services (Banking and Capital Markets, Payments, Digital Currencies, and Value Added Services) and Distribution Channel (Bank Channel, App market, Distributors, and Aggregators): Global Opportunity Analysis and Industry Forecast, 2019–2026". According to the report, the global open banking market was pegged at $7.29 billion in 2018, and is expected to reach $43.15 billion by 2026, growing at a CAGR of 24.4% from 2019 to 2026.
Major determinants of the market
Potential benefits of open banking, favorable government regulations, improved overall customer engagement with open banking APIs, and surge in adoption of new applications and services have boosted the growth of the global open banking market. However, lack of awareness around open banking, data security, and managing threats related to security hampers the market growth. On the contrary, increase in collaborations between banks and Fintech firms is expected to create new opportunities for the market players in the coming years.
Covid-19 impact: The pandemic has positively affected the global open banking industry.
The outbreak of Covid-19 has increased the demand for contactless payment and payments through use of chip and pin machines, which has favored the market growth.
Several Fintech companies gathered forces to create digital solutions via open banking and have asked for fiscal support from the government. This will help the market growth.
Rapid launch of new open banking solutions is expected to boost market growth.
The banking and capital markets segment dominated the market
By financial services, the banking and capital market segment held the largest share in 2018, accounting for more than half of the global open banking market, due to surge in adoption of open banking services in capital markets. However, the payments segment is expected to manifest the highest CAGR of 27.3% during the forecast period, owing to surge in use of banking platforms to make payments such as debit cards, credit cards, online payments, and others.
The distributors segment to portray highest CAGR through 2026
By distribution channel, the distributors segment is expected to manifest the highest CAGR of 27.0% during the forecast period, owing to rise in awareness related to adoption of the role of a distributor among banks and surge in efforts taken by banks to extend their digital market presence by distributing third party services. However, the app market held the largest share in 2018, contributing to more than two-fifths of the global open banking market, due to surge in adoption of smartphones across the globe and increase in awareness regarding use of banking apps.
The global open banking market across North America is expected to register the highest CAGR of 26.5% during the forecast period, due to quick adoption of advanced technologies and presence of the majority of key players that work toward the availability of open banking services in the region. However, the market across Europe held the largest share in 2018, accounting for more than two-thirds of the market, owing to government directives for the banks to mandatorily open APIs.
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