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Open Banking now a “Must Have” globally

New research shows that Open Banking is now regarded as a key part of the banking landscape, with 99% of respondents considering it either a ‘must have’ or ‘important’, up from 94% last year.

The proportion of global financial institutions that consider it a ‘must have’ has risen to 61%, a notable increase from 2021 (51%) – according to Finastra.

The ‘Financial Services: State of the Nation Survey 2022’ finds that views on Open Banking and Finance are also maturing with some 94% of financial institutions regarding it as either a ‘must have’ or ‘important’ in the context of data sharing (up from 91% in 2021).

Almost half (48%) of respondents now consider open finance a ‘must have’, a notable rise on last year (38%).

The increase is significant across all territories, but particularly pronounced in the UAE (up from 50% in 2021 to 71% this year), the UK (up from 33% to 47%) and the US (up from 45% to 56%).

This suggests that the sector globally is actively investigating products and services that would benefit from an ecosystem model.

Some 85% of professionals agree that Open Finance is already making the industry more collaborative and is having a positive impact on the industry.

Key Insights:

  • Banking as a Service (BaaS) and Embedded Finance have become an industry norm – 83% of institutions agree that BaaS and embedded finance is already expected/demanded by customers. More than a third (35%) of institutions surveyed have improved or deployed BaaS in the past year. A fraction less (33%) have deployed embedded finance.
  • Drivers for technological adoption remain consistent with previous years
    • Growing our business (48%), meeting current and future customer expectations (45%), staying ahead of our competitors (42%), and cost cutting (42%) are all key drivers
    • Interestingly, half of institutions (50%) now have all or most of their software stack on cloud-based solutions, with a further third (32%) splitting equally between cloud and on-premises solutions.
  • Global financial institutions are being prudent with their technology investments – with 82% noting constraints compared to 2021. Despite the current economic uncertainty and wider cost pressures, the majority (74%) forecast that they will have resumed their full investments by the end of H1 2023.
  • Support for ESG is widespread – Almost 9 in 10 organizations (86%) agree that it’s important for the financial services and banking sector to support environmental, social and governance initiatives. Linked to this, 82% of respondents agree that green lending presents an opportunity for growth and revenue generation, with the UAE (94%) and Singapore (88%) showing the strongest appetite.

The research was conducted amongst 758 professionals at financial institutions and banks across France, Germany, Hong Kong, Singapore, the UAE, the UK and the US.


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