Open Banking Market Report Scope & Overview:

Open Banking Market was valued at USD 23.20 billion in 2023 and is expected to reach USD 180.31 billion by 2032, growing at a CAGR of 25.63% from 2024-2032. 

This report includes a comprehensive analysis of key metrics driving this growth, including fraud and security data, regulatory impact, API transaction volume, third-party provider growth, and the churn rate of Open Banking services. The market is being reshaped by heightened demand for customer-centric financial solutions, underpinned by advancements in secure APIs and progressive regulatory frameworks such as PSD2. Increased collaboration between banks and fintechs is accelerating innovation, while growing consumer trust in digital ecosystems is fueling transaction volumes.

Finastra’s global survey reveals that 85% of financial institutions believe open finance is making services more collaborative, highlighting the broader shift towards integrated financial offerings. Additionally, 48% of institutions have deployed or enhanced Banking as a Service (BaaS) capabilities, signaling a significant embrace of embedded finance solutions.

However, data security remains a critical focus, influencing both user retention and provider scalability. As third-party players multiply and services diversify, market dynamics are poised for continuous transformation across the financial services landscape.

U.S. Open Banking Market was valued at USD 4.61 billion in 2023 and is expected to reach USD 34.49 billion by 2032, growing at a CAGR of 25.06% from 2024-2032. 

This rapid expansion is driven by a convergence of technological, regulatory, and consumer behavior trends. Increased adoption of digital banking services, along with rising demand for personalized financial products, is pushing banks to open their data infrastructure to fintech partners. The emergence of consumer data rights frameworks and growing pressure for financial transparency are also catalyzing adoption. Furthermore, API standardization, combined with strong venture capital backing for fintech innovation, is accelerating integration across platforms. As trust in digital financial ecosystems deepens, more consumers and institutions are embracing the open banking model.

Market Dynamics

Drivers

• Rising demand for personalized financial services is pushing institutions to adopt open APIs for deeper consumer insights and engagement.

The growing need for personalized financial services will restructure the financial landscape and will lead banks and fintechs to adopt open APIs. Noting that consumers today anticipate customized experiences, institutions are utilizing customer-permissioned data to deliver hyper-personalized products and advisory solutions. On the other hand, open banking ensures a secure framework for third-party users to access data that can help them with tailor-made credit offerings, budgeting and wealth management. It undergirding this ecosystem accelerates real-time analytical capabilities, turning into better decisions and greater financial inclusion. In consequence, we move away from traditional banking to numerous collaborative financial models under the control of users. Reducing friction and anticipating needs is how financial providers compete today and building loyalty over the long term. So the need to differentiate, in an already crowded marketplace, is driving adoption elsewhere, particularly where the propensity for, and acceptance of, digital solutions is high, together with a supporting regulatory environment.

Restraints

• Consumer mistrust toward data sharing practices is slowing widespread adoption of open banking despite technological readiness and regulatory momentum.

A barrier to open banking’s capacity to grow, consumer mistrust around data sharing practices remains an obstacle. When third-party providers are involved, this is another source of concern, as many users are unaware of how their sensitive financial data will be used, stored and protected. These concerns are only heightened by high-profile breaches and little clarity on consent mechanisms. If institutions are rightly focused on security protocols and compliance frameworks, the end-user experience might feel disconnected from those assurances. Even in tech-savvy societies, without trust, uptake is constrained. Again, it can depend on the financial literacy, if the users do not know what is an API driven ecosystem, then they are less likely to use it. Whilst transparency and control is essential, consumers still feel they lose both in open banking. Consequently, the industry now has the challenge of not only creating secure systems but also conveying their value and safety.

Opportunities

• Cross-industry collaboration is opening new revenue streams as banks partner with fintechs, retailers, and tech firms in the open finance era.

Cross-industry collaboration is rapidly becoming a defining feature of the open banking era, opening up new revenue models for banks and fintechs alike.  Particularly it is seen in non-financial sectors too as institutions collaborate with e-commerce, telecom, and software providers on embedded finance solutions. It enables lending, insurance, or payment products to be embedded in existing consumer experiences. Banks get wider distribution channels while partners receive easily integrated financial tools that drive customer retention. In August 2024, Finastra announced a strategic partnership with Tech Mahindra to accelerate digital transformation for corporate banks. Under this partnership, Tech Mahindra becomes Finastra’s exclusive global implementation partner for its Cash Management platform and the preferred partner for its Trade Innovation and Corporate Channels solutions in the USA, Canada, and Europe.

This synergy is fueled by the data-sharing foundations of open banking, allowing for hyper-personalization in real-time and a more intelligent design of services. Importantly, they also enable monetization through data-based value-added services. Industries converging around financial services emerges as the next layer of the economy being constructed across stacks turning banks from product providers to embedded service enablers

Challenges

• Cybersecurity threats and data privacy breaches pose systemic risks as open banking expands its surface area of digital exposure.

Cybersecurity threats and data privacy breaches are escalating as open banking broadens the digital exposure of financial institutions and third parties. The digital interconnectedness of the ecosystem wherein APIs allow access to sensitive financial data across multiple platforms poses new entry points for cyberattacks. Systemic Phishing Schemes, API vulnerabilities, and Insider Threats Result in Trust Erosion & Regulatory Backlash Despite existing protocols for encryption and authentication, it is extremely difficult to maintain a consistent secure environment across disparate entities. This fragmentation is further complicated by the pace at which technology is evolving and regulatory compliance frameworks take a back seat. This can only happen if the financial institutions invest in architecture that is adaptive whilst also being robust when an incident response mechanism is set in place. The ability to manage digital risk will define connectedness maturity, and with it, resilience will come to be seen as a core differentiator for open banking, making survival without it hard over the long haul.

Segment Analysis

By Deployment

On-premise segment dominated the Open Banking Market with the highest revenue share of about 58% in 2023 due to the higher preference among traditional banks for more control, security, and regulatory compliance over at least their sensitive financial data. For organizations with legacy infrastructure, on-premise solutions worked best as it allows them to keep everything in-house and limit outsourcing. Fourth, larger financial organizations are also opting to invest in stronger internal IT environments which further underpins their preference for bespoke deployment, system integration and data sovereignty in multiple jurisdictions.

Cloud segment is expected to grow at the fastest CAGR of about 26.90% from 2024–2032, driven by the increasing demand for scalable, agile, and cost-effective infrastructure. as organizations embrace the scalability, agility, and cost-effectiveness offered by cloud-based infrastructure. Cloud-native platforms allow for accelerated fintech innovation by deploying APIs faster, providing real-time analytics, and being constantly updated. The cloud adoption by institutions embarking on digital transformation serves as a strategic lever driving operational efficiency, third-party integration, and reduction in long-term IT overhead without impacting either performance or compliance.

By Service

Banking & Capital Markets segment dominated the Open Banking Market with the highest revenue share of about 44% in 2023, largely due to its early and large-scale adoption of API-driven services. These institutions have led the charge in implementing open banking to support digital banking services, customer onboarding, and advanced trading platforms. Strong regulatory push, especially in Europe and Asia-Pacific, combined with a need to defend market share against fintech disruptors, has made banking and capital markets the central players in shaping open banking frameworks and offerings.

The payments segment is expected to grow at the fastest CAGR of about 26.83% from 2024–2032, driven by the growing need of consumers for secure, transparent, and low-cost transactions. Direct bank-to-bank transfers via open banking eliminates the need for card networks, which translates into lower transaction fees. Merchants and consumers alike are getting on board with innovations including instant payments and request-to-pay functionalities. Payment providers are quickly aligning with open frameworks due to regulatory support and the maturity of APIs using these new frameworks to create better customer experiences and fostering increased digital wallet integration.

By Distribution Channel

App Markets segment dominated the Open Banking Market with the highest revenue share of about 39% in 2023, due to the significant growth of consumer-facing applications developed on open banking APIs, and rising demand for tools on app markets. This includes everything from apps for budgeting to applications to help you invest, all opportunistically built on secure access to user-permissioned financial data to provide real-time, tailored services. To boost the adoption and loyalty of users, fintech developers and digital banks often focused on engagement using an app-based approach. Fast scaling while providing easily comprehensible UIs has made them integral to open banking value delivery.

Distributors segment is expected to grow at the fastest CAGR of about 28.35% from 2024–2032 due to their pivotal role in aggregating and delivering financial services across partner ecosystems. Distributors such as financial marketplaces and embedded finance providers are harnessing open banking data to offer customized product bundles at the point of need. This evolution allows retailers, tech platforms, and telecoms to integrate banking functionality directly into their offerings, enabling seamless experiences that expand access while capturing new customer segments in underserved or niche markets.

Regional Analysis

Europe dominated the Open Banking Market with the highest revenue share of about 38% in 2023 due to early regulatory intervention and robust digital infrastructure. The implementation of the PSD2 directive mandated banks to open APIs to licensed third parties, fostering competition and innovation across the financial ecosystem. Strong consumer protection laws, mature fintech ecosystems, and high smartphone penetration further accelerated adoption. European institutions rapidly adapted, driving use cases in payments, account aggregation, and personalized finance, making the region a global leader in open banking maturity.

Asia Pacific is expected to grow at the fastest CAGR of about 28.07% from 2024–2032, fueled by growing digital economy, high mobile penetration, and government initiatives to drive open finance. Progressive policies and technology infrastructure that countries like India, Singapore and Australia are already implementing (digital identity systems and national API standards). The sizable unbanked populations and fintech innovation in the region encourage scalable, scalable, inclusive models and tech-forward open banking models.

Key Players

• Banco Bilbao Vizcaya Argentaria, S.A. (API Market, Open Platform)

• Crédit Agricole (CA Store, Open API Portal)

• DemystData, Ltd. (Demyst Platform, Data Marketplace)

• Qwist (ndgit API Platform, Consent Management)

• Finastra (Open Banking Gateway, FusionFabric.cloud)

• FormFree Holdings Corporation (AccountChek, Passport)

• Jack Henry & Associates, Inc. (Banno Digital Toolkit, JHA BankAnywhere)

• Mambu (Core Banking, Process Orchestrator)

• MineralTree, Inc. (TotalAP, TotalAR)

• NCR Corporation (Open Banking, Digital Banking)

• Tink (Account Aggregation, Payment Initiation)

• Societe Generale (Open Banking Portal, API Market)

• Nordigen Solutions (Free Open Banking API, Transaction Categorization)

• Deposit Solutions (ZINSPILOT, Savedo)

• Yapily Ltd. (Yapily Connect, Data Plus+)

• BBVA SA (Open Platform, API Market)

• Revolut Ltd. (Open Banking API, Financial SuperApp)

• Plaid (Link, Transactions)

• Finicity (Mastercard) (Connect, Lend)

• TrueLayer (Data API, Payments API)

• MX Technologies (Connect, Insights)

• Token.io (Payments, Data)

• Flinks (Connect, Enrichment)

• Bud Financial (Platform, Insights)

• OpenWrks (Connect, MyBudget)

Recent Developments:

• ​In April 2024, Finastra unveiled its Next Gen Mobile Banking solution at Ignite! 2024, designed to enhance digital banking experiences for community banks and credit unions. The platform offers customizable interfaces, cross-platform compatibility, and advanced security features like Passkey Authentication and User Trusted Device Management.

• ​In January 2024, Finastra partnered with Databricks to enhance its product development and AI capabilities. The collaboration led to the creation of "Secure Zone," a data platform enabling developers to build and deploy AI solutions, including generative AI, with improved performance and security.

• In April 2024, Mambu introduced several enhancements to its cloud banking platform, including custom penalty fee calculations for loans, Thai language support in the user interface, sustainability reports for ESG compliance, and improved card transaction traceability through Marqeta integration.