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Open banking investments: are billions in revenue at stake?

While some financial institutions look to open banking as a compliance effort, others see it as an opportunity to improve the value propositions in payments, retail banking, wealth management, insurance, investments and other segments of finance. But how much could this opportunity be worth, exactly?

TL;DR – Quick summary

  • The connections and data made available by open banking are opening up space for a new wave of value creation.

  • Research from Accenture estimates the global open banking market could be worth (hundreds of) billions for institutions that succeed in creating value for their customers and partners.

  • We surveyed financial executives in Europe to understand how open banking investments are shaping up in 2021.

Open banking investments: are billions in revenue at stake?

Open banking is helping accelerate the digital transformation in the financial industry, and the connections – and data – now available in the market are opening up space for a new wave of value creation.

Accenture Research finds that the global open banking market could be worth billions for the financial service providers that succeed in creating value for their customers and partners – estimating that a whopping $416 billion in revenue might be at stake.

This number, however, does not capture the total amount of spending on open banking objectives – which may include investments (resulting in improvements) across IT, product, and third-party services.

In other words, we believe the open banking total addressable market may be even bigger.

Are investments aiming towards this multi-billion opportunity?

Early in 2020 we conducted a survey to find out how open banking investments were shaping up across Europe – and the results suggested financial executives were backing these initiatives up with a lot of money. Not only were the investments massive, at a median of €50 million-€100 million, but open banking budgets were also reported to be growing, indicating that the industry was on the verge of a monumental shift towards data-driven services.

Of course, a lot of things didn’t quite go according to plan in 2020, and financial institutions – as well as their budgets – had to adapt to an abrupt change in circumstances.

To understand the pandemic’s impact on open banking, we surveyed financial executives again in 2021. While we’ve found that the shift to digital has led banks to change priorities and focus on the creation of digital services (resulting in an increased focus on open banking), we also wanted to understand how their investments were impacted.
With an addressable market with this much potential, we can’t help but wonder if executives recognise the potential (massive) ROI that could be lying in wait.

Our upcoming report – exploring open banking investments and use cases in 2021 – follows the money and sheds light on not only how much financial executives in Europe are investing, but which use cases they are most eager to pursue. Stay tuned for all the facts and figures, coming up in a few weeks.

TL;DR – Quick summary

  • The connections and data made available by open banking are opening up space for a new wave of value creation.

  • Research from Accenture estimates the global open banking market could be worth (hundreds of) billions for institutions that succeed in creating value for their customers and partners.

  • We surveyed financial executives in Europe to understand how open banking investments are shaping up in 2021.

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