Open Banking Market

Market Definition

Open banking refers to a system where banks and financial institutions share customer data securely with third-party providers through Application Programming Interfaces (APIs), with the customer's consent. This allows customers to access new financial services, such as budgeting apps, account aggregation, and personalized financial products.

Open Banking Market Overview

The global open banking market size was valued at USD 32.09 billion in 2023 and is projected to grow from USD 39.91 billion in 2024 to USD 224.95 billion by 2031, exhibiting a CAGR of 28.02% during the forecast period.

This market is registering rapid growth, driven by regulatory initiatives, technological advancements, and increasing consumer demand for digital financial services. The market is fueled by fintech innovation, enabling services such as account aggregation, personalized financial products, and seamless payments.

Major companies operating in the open banking industry are Plaid Inc., Tink AB, Yodlee, Inc., GoCardless Ltd, TrueLayer Ltd., Stripe, Inc., TOKEN, INC., Bud Financial Inc., Salt Edge Inc., Mastercard, Qwist GmbH, Jack Henry & Associates, Inc., Mambu, MX Technologies Inc., and Noda.

Additionally, the rise of embedded finance, where open banking integrates with non-financial platforms such as e-commerce and social media, is further accelerating adoption. Open banking is expected to reshape the financial ecosystem, promoting greater competition, financial inclusion, and new revenue streams for banks and fintech companies alike.

• In February 2025, OMB Bank announced the launch of OMBX, a dedicated embedded finance division aimed at supporting fintechs and digital companies with seamless banking solutions. With seven fintech clients already onboard, OMBX provides scalable and compliant banking infrastructure, fraud prevention, payment processing, and analytics tools.

Key Highlights:

1. The open banking industry size was valued at USD 32.09 billion in 2023.
2. The market is projected to grow at a CAGR of 28.02% from 2024 to 2031.
3. North America held a market share of 39.65% in 2023, with a valuation of USD 12.72 billion.
4. The market in North America is anticipated to grow at a CAGR of 29.86% during the forecast period.
5. The services segment garnered USD 21.15 billion in revenue in 2023.
6. The on-premise segment is expected to reach USD 141.54 billion by 2031.
7. The payment services segment is expected to reach USD 84.63 billion by 2031.
8. The app markets segment is expected to reach USD 75.40 billion by 2031.

Market Driver

“Growing Consumer Demand for Personalized Banking Experiences is Driving the Market”

Technological advancements in financial services are driving the open banking market. Innovations in cloud computing, Artificial Intelligence (AI), and API-driven architectures are enabling financial institutions and fintech companies to develop more secure, efficient, and scalable open banking solutions.

These technologies facilitate seamless data sharing, enhance fraud detection, and improve customer authentication, making open banking more accessible and reliable. Additionally, the growing consumer demand for digital and personalized banking experiences is further accelerating the market growth.

Consumers increasingly seek seamless, real-time, and tailored financial solutions as mobile banking, digital payments, and AI-powered financial services continue to evolve.

• In December 2024, Eviden, in partnership with Ordo and ByzGen, launched a pilot open banking solution enabling real-time direct payments between businesses and consumers. The solution also integrates AI-powered financial monitoring to assist vulnerable customers with personalized payment plans. Expected to scale fully in the UK by 2025, this open banking innovation aims to streamline payments and reduce costs for businesses.

Market Challenge

“Data Security and Privacy Concerns Remain a Major Obstacle”

The open banking market faces significant challenges related to data security and privacy concerns. The risks of cybersecurity threats, data breaches, and unauthorized access also increase with the expansion of financial data sharing across multiple platforms.

Open banking relies on APIs to facilitate data exchange between banks and third-party providers, hence, consumers may hesitate to share their financial information due to concerns about how their data is stored, processed, and used. Financial institutions implement robust security measures such as end-to-end encryption, multi-factor authentication, and AI-driven fraud detection.

• In October 2024, Mastercard launched Connect Plus, a data-consent platform that allows consumers to manage, monitor, and control third-party access to their financial data in real time. Currently in its pilot phase, the platform is set for full U.S. availability by 2025.

Another significant challenge is the lack of standardization across regions, as different countries enforce varying open banking regulations and technical frameworks. This regulatory fragmentation creates interoperability issues, making it difficult for banks, fintech companies, and third-party providers to develop solutions that work seamlessly across multiple markets.

A viable solution is the development and adoption of international open banking standards that facilitate cross-border financial transactions and ensure smoother integration between financial institutions and third-party providers.

Market Trend

“Embedded Finance and API-driven Ecosystems Are Expanding the Open Banking Market”

The open banking industry is accelerating the rise of embedded finance and BaaS, enabling financial services to be seamlessly integrated into non-financial platforms.

Businesses across industries-such as e-commerce, ride-hailing, and social media-can now offer payment processing, lending, insurance, and other financial products directly within their applications, improving user convenience and engagement. This trend reduces the reliance on traditional banking channels and opens new revenue opportunities for companies by monetizing financial transactions.

• In October 2024, HSBC launched SemFi, a jointly owned venture with Tradeshift, to provide embedded finance solutions for businesses. SemFi will integrate HSBC’s payment, trade, and financing solutions into various e-commerce and marketplace platforms, including Tradeshift’s B2B network. SemFi will enable access digital invoice financing and enhance spend management through HSBC virtual card solutions.

Additionally, the increasing adoption of API-based banking solutions is transforming financial services by promoting interoperability and real-time data exchange between banks, fintech firms, and third-party providers.

Open APIs enable secure access to banking infrastructure, allowing for the development of innovative financial products, such as automated wealth management, instant credit approvals, and AI-driven financial planning tools.

Open Banking Market Report Snapshot

Market Segmentation:

• By Component (Solutions, Services): The services segment earned USD 21.79 billion in 2023, due to the increasing demand for consulting, integration, and API management services to support the adoption of open banking.
• By Deployment Mode (Cloud-based, On-premise): The on-premise segment held 67.91% share of the market in 2023, due to stringent regulatory compliance requirements and data security concerns among financial institutions.
• By Application (Payment Services, Personal Finance Management, Lending, and Wealth Management): The payment services segment is projected to reach USD 84.63 billion by 2031, owing to the surge in digital transactions and real-time payment solutions enabled by open banking APIs.
• By Distribution Channel (App Markets, Bank Channels, Aggregators, and Distributors): The app markets segment is projected to reach USD 75.40 billion by 2031, owing to the rising adoption of fintech apps and third-party platforms offering personalized financial services.

Open Banking Market Regional Analysis

Based on region, the market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.

North America accounted for a substantial open banking market share of 39.65% in 2023, with a valuation of USD 12.72 billion. The market in the region is projected to expand, driven by the increasing adoption of open banking services, strong presence of fintech players, and favorable regulatory initiatives supporting financial data sharing.

The U.S. leads the market, with major banks and technology providers collaborating to enhance digital banking experiences, while Canada is registering significant growth due to rising fintech investments and regulatory advancements. The widespread integration of AI, ML, and blockchain in financial services is further accelerating market expansion.

The open banking industry in Asia Pacific is expected to register the fastest growth, with a projected CAGR of 28.24% over the forecast period. Countries such as China, India, Australia, and Singapore are registering growth, due to increasing smartphone penetration and government-led open banking initiatives.

• In November 2024, Brankas launched an integrated open banking compliance solution with ADVANCE.AI’s eKYC technology at the Singapore Fintech Festival 2024. The platform helps banks meet regulatory requirements like BI-SNAP in Indonesia while enabling them to launch new financial products with enhanced security, real-time identity verification, and fraud detection.

The market in the region is fueled by the rising consumer demand for digital banking and rapid expansion of fintech startups. Rapid fintech adoption, a booming e-commerce sector, and growing investment in embedded finance solutions are expected to propel the market in the region in the coming years.

Regulatory Frameworks

• In the U.S., the Consumer Financial Protection Bureau (CFPB) is the primary US regulatory authority for open banking. The CFPB proposed a rule to implement Section 1033 of the Dodd-Frank Act of 2010. If finalized, this rule will establish a federal framework for open banking in the U.S.
• In Europe, the European Banking Authority (EBA) oversees open banking under the Revised Payment Services Directive (PSD2). PSD2 mandates banks to provide third-party access to payment accounts via APIs, promoting innovation while ensuring strong customer authentication (SCA) and data protection.
• In Japan, the Financial Services Agency (FSA) and Bank of Japan govern open banking under the amended Banking Act, requiring banks to establish partnerships with third-party providers via APIs. Japan's model focuses on voluntary participation with strong customer authentication and cyber security measures.

Competitive Landscape:

The open banking industry is characterized by a large number of participants, including established corporations and rising organizations. Traditional financial institutions are increasingly collaborating with fintech firms and third-party providers to enhance their service offerings, while technology-driven startups are leveraging APIs, AI, and data analytics to introduce innovative financial solutions.

Market players are focusing on expanding their API ecosystems, enhancing cyber security measures, and integrating advanced data-sharing technologies to gain a competitive edge.

Strategic partnerships, mergers and acquisitions, and geographic expansion are common strategies adopted by key players to strengthen their market presence. Companies that can offer scalable, interoperable, and user-centric open banking solutions are expected to gain a significant market advantage as consumer expectations for seamless and secure financial experiences grow.

• In February 2024, Fidelity Information Services announced the integration of its Open Access platform with leading data networks, including Akoya, Yodlee, MX, and Plaid, to enhance secure open banking for financial institutions and consumers. The platform enables users to securely share their financial data with third-party apps while maintaining control over access and permissions.

List of Key Companies in Open Banking Market:

• Plaid Inc.
• Tink AB
• Yodlee, Inc.
• GoCardless Ltd
• TrueLayer Ltd.
• Stripe, Inc.
• TOKEN, INC.
• Bud Financial Inc.
• Salt Edge Inc.
•  Mastercard
• Qwist GmbH
• Jack Henry & Associates, Inc.
• Mambu
• MX Technologies Inc.
• Noda

Recent Developments (Partnerships / New Launch)

• In November 2024, Unzer partnered with Mastercard to enhance open banking payments across Germany, Austria, and Denmark. The collaboration integrates Mastercard’s Open Banking solutions into Unzer’s payment gateways, enabling secure and seamless account-based e-commerce payments. This partnership aims to create a unified digital payment ecosystem, offering merchants and consumers faster, more convenient, and flexible payment options.
• In October 2024, Axway enhanced its open banking capabilities by integrating SBS technology, helping financial institutions comply with the new CFPB open banking rule. Its Amplify Open Banking solution enables secure data access, seamless API integration, and regulatory compliance while supporting Banking-as-a-Service, API monetization, and embedded finance strategies.
• In October 2024, Banfico announced the launch of its new subsidiary, Banfico Europe GmbH, in Germany, to support European banks with Verification of Payee and PSD3 compliance.
• In July 2024, Shift4 and Fabrick announced a partnership to optimize payment acceptance across Europe by integrating Fabrick’s Open Finance solutions with Shift4’s acquiring capabilities. The collaboration aims to streamline interoperability for end-to-end payment processing, leveraging Fabrick’s Payment Orchestra Platform and Shift4’s principal member license to offer businesses secure, seamless, and efficient payment solutions.
• In June 2024, Mastercard launched its Start Path Open Banking and Embedded Finance program, supporting nine fintech startups in scaling open banking innovation. The initiative provides access to Mastercard’s technology, data connectivity, and global network, helping startups enhance financial services with seamless money movement and cash flow tools.
• In April 2024, Worldline partnered with RiskQuest BV to enhance open banking-based credit checking solutions in the Dutch market. The collaboration integrates RiskQuest’s expertise in financial risk analysis with Worldline’s open banking platform.