Our 2021 survey of financial executives shows open banking is more popular than ever. The share of executives feeling positive towards open banking increased from 55% in 2019 to 71% in 2021.
More importantly, it is now widely considered a higher priority area with 8 out of 10 financial executives (83%) saying that it represents a revolution (rather than an evolution) for the industry.
These two findings imply that we can expect large transformational projects related to open banking coming from banks in the upcoming years, rather than a series of smaller incremental changes.
As part of this transformational change, third-party providers (TPPs) continue to maintain an important role ever since banks published their first APIs in 2019. The number of registered TPPs has seen a sharp increase, almost reaching the 500 mark across the UK and European Economic Area by mid-2021 – a year-over-year growth of 53%.
Unsurprisingly, executives position open banking as a strategic enabler of great importance for their digital roadmaps, and almost 40% expect their organisation to realise their current open banking agenda over the next five to ten years.
It is also clear that open banking is seen as a means to an end for many of the digital transformation objectives banks are pushing towards. Three key areas that executives expect open banking to enable include:
1. Enhancing the customer experience
2. Launching new digital services
3. Increasing revenue
Besides these three objectives, we also see that the more mature bank organisations tend to also add objectives related to compliance, risk exposure and streamlining operational processes such as underwriting.
Lastly, the open banking innovation will also capitalise on new emerging themes on the horizon. Open banking archetypes indicating how to proceed as well as industry trends like open finance – which extends data accessibility to a wider range of financial products – are now being more actively explored by financial institutions and national regulators, and are perceived as key for realising the full long-term potential of open banking.