HAMPSHIRE, U.K.–Despite what is currently low awareness among consumers, look for a significant surge in the years ahead in solutions and offers around open banking, according to a new forecast.
Open banking is the system of allowing access and control of consumer banking and financial accounts through third-party applications. Open banking and credit unions was recently discussed at some length during a webinar on the topic that CUToday.info reported here.
Juniper Research is forecasting a 470% increase over the next four years, with the total number of API (Application Programming Interface) calls generated via Open Banking to exceed 580 billion by 2027, from only 102 billion in 2023, according to the company.
“Strong interest in new Open Banking-based services, such as PFM (Personal Financial Management) tools and account access for underwriting for loans and credit, is driving this growth, as users seek to gain better control of their finances across different accounts, exacerbated by the impact of the cost-of-living crisis,” Juniper said.
In its study, Juniper said that given open banking’s low consumer awareness, infrastructure vendors “must work with the wider ecosystem to fully educate users and ensure they understand the benefits that sharing data can bring.”
Europe To Lead the Way
Many analysts have already said open banking innovation will likely first take place outside the United States, and the Juniper Research study echoes that.
It is forecasting:
- Europe’s share of API calls predicted to be 70% of the global total in 2027
- Europe has the best-established set of API connections of any region, having deployed Open Banking rails as part of PSD2
- Deployments are now becoming more advanced and covering a greater number of banking services than ever before, such as credit cards or mortgages, creating significant opportunities for vendors to explore.
‘Regulator-Led Approach’
“Europe has led the way on open banking, and is an example of how regulator-led approaches can stimulate innovation,” said Research co-author Nick Maynard. “As a well-established market, Europe’s growth rate will dip compared to others, but it will still serve as an innovation hub for open banking development.”
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