The global open banking systems market is anticipated to grow over the forecast period in line with the advances in technology, the subsequent rise in the adoption of big data analytics, and the shifting focus of retail banks from independent technology projects to consolidated technological improvement.
Competition within the open banking systems market is intensifying as several banks are shifting their conventional focus on products to provide more customer-centric services. As such, banks are looking forward to leveraging the available customer data, advances in technology, big data analytics, and artificial intelligence to provide innovative and personalized services tailored to the changing requirements of individual customers, thereby driving the growth of the market. However, growing concerns over the misuse of personal data, online frauds, and data security are hampering the growth of the market.
The open banking systems market has been segmented into the distribution channel, service type, and region. Based on the distribution channel, the market has been further segmented into bank channels, app markets, distributors, and aggregators. The bank channels are managing to generate revenues by offering Application Programming Interfaces (APIs) that can be utilized by third-party developers to develop services and applications for financial institutions as well as by crowdsourcing the development of new technologies.
Based on service type, the open banking systems market has been further segmented into transactional services, communicative services, and information services. Transactional services are particularly popular among individuals and small businesses. On the other hand, informative services can be customized to provide account information to customers according to their needs.
Based on the region, the open banking systems market has been further segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa (MEA). The North American regional market holds the largest market share as the banking institutions in the region is making aggressive investments in developing APIs. On the other hand, Asia Pacific is expected to emerge as the fastest-growing regional market, particularly because China is increasingly adopting the open banking system. While China holds a strong potential for innovation, there are no mandatory API specifications in the country.
The key players in the open banking system market include Accern Corporation, JackHenry & Associates, Inc., D3 Technology, Inc., DemystData, Figo GmbH, FinGenius, FormFree Holdings Corporation, Malauzai Software Inc., Mambu GmbH, and MineralTree, Inc. These market players are trying to strengthen their foothold in the market by adopting disruptive business models based on APIs that can be operated outside the core business of the banks. For instance, new businesses or independent challenger banks are being launched to offer specific products or to serve specific industry verticals.
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Artificial Intelligence (AI), Virtual Reality (VR), and Augmented Reality (AR) solutions are anticipated to substantially contribute while responding to the COVID-19 pandemic and address continuously evolving challenges. The existing situation owing to the outbreak of the epidemic will inspire pharmaceutical vendors and healthcare establishments to improve their R&D investments in AI, acting as a core technology for enabling various initiatives. The insurance industry is expected to confront the pressure associated with cost-efficiency. Usage of AI can help in reducing operating costs, and at the same time, can increase customer satisfaction during the renewal process, claims, and other services. VR/AR can assist in e-learning, for which the demand will surge owing to the closure of many schools and universities. Further, VR/AR can also prove to be a valuable solution in providing remote assistance as it can support in avoiding unnecessary travel. The report will account for Covid19 as a key market contributor.