2021 Survey Report

The open banking revolution

We surveyed senior financial executives in Europe to better understand their views on the impact of open banking – and when they expect their businesses, as well as the industry as a whole, to realise its promise. Here’s what we found.

Executive summary

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.

Embracing the open banking shift

Despite the skepticism open banking was originally met with – it has clearly gained popularity over the years as there’s been a significant increase in the adoption of open banking across all sectors of the financial services industry. Since last year, positive attitudes toward open banking have risen 10 percentage points and have grown from 55% in 2019 to 71% in 2021.

Country-level differences

When looking at the results in each country, Belgium (87.0%), the Netherlands (85.0%), and the UK (81.3%) rank the highest in seeing open banking as a positive development, while Portugal (59.1%), Sweden (57.9%), and Denmark (50.0%) have less positive sentiment. Interested in what could explain the differences? Read the full report for a closer look.

Open banking seen as a revolution

In addition to a more positive outlook, executives don’t just see open banking as a next step in banking. In fact, a whopping 82.8% see it as a revolution that will forever change the industry. And that’s a lot.

Regulatory movement resulting in rapid rise of TPPs

Since the outlook towards open banking has improved, the number of TPPs has grown exponentially. As of June 2021, the UK and European Economic Area (EEA) had registered and authorised 497 TPPs, which represents a 53.4% increase year-over-year.

The view across different industry segments

While a majority of financial executives (60.1%) see benefits for their industry and for their organisation (55.8%), there are some differences among the results of different industry segments. Those working in wealth management were the most optimistic about the impact for their own business (68.4%). This is not surprising, since open banking helps these firms get better insight into client assets, liabilities and equity, enabling them to provide better services to their clients. Mortgage providers, on one side, saw more benefits for the industry (81.8%) than for their business (45.5%). On the other side, challenger banks were more likely to see a positive impact for their own business (58.3%) than for the industry (33.3%).

What now, what next, where to?

Most financial institutions are looking to generate a return on their investments in some way. Based on last year's survey. Large banks invested between 50 and 100 million euros in open banking. While most of the investment will be used to modernise IT systems, redesign core banking processes, and expose open APIs, some will also be used to achieve key open banking objectives.

Key open banking objectives

This year, we asked executives how important open banking will be in realising different business objectives – and at least one-fourth of executives rated open banking as ‘extremely important’ in realising all the items on the list. The objectives that came out on top, however, were: improving customer experience (35.7%), launching new digital services (35.1%) and increasing revenue (34.4%). At the bottom of the list are objectives commonly tied to more advanced use cases, and usually being pursued by more mature organisations, such as reducing risk exposure (28.6%), reducing operation costs (28.3%) and improving underwriting (25.7%).

Bigger changes are yet to come

The conversation around the future of finance will start shifting from open banking → open finance → open data and will act as tailwinds for adoption and innovation. Executives recognise they are facing a transition that could take years to complete. A significant portion (39.9%) believe that it will take their businesses five to ten years to complete their open banking objectives, while 36.9% think it will take more than a decade. An even bigger portion (43.7%) expect the industry will take over a decade to get there.

The Tink take

Based on experience at Tink, this expected timeframe seems reasonable. Launching several open banking initiatives doesn’t happen overnight, and fully implementing open banking as a core of the business can take time. We do have a recommendation for a good place to start, however – and we’ve laid it out in the full report.

Emerging open banking archetypes

Ultimately, financial executives are at a crossroads – do they stay compliant or choose to explore new archetypes unlocked by open banking, such as ‘Enhanced banking’, Banking-as-a-platform, or Banking-as-a-service? Of course, these paths are not mutually exclusive and organisations can incorporate multiple archetypes to meet the different objectives of each part of the business. We explore each of these archetypes in more depth – and share our take on which is the most competitive route to take in the full report.

Take-aways for consideration

This year has seen a new high in the sentiment towards open banking, with 71.1% of executives expressing a positive attitude. Additionally, eight out of ten executives see open banking as a revolution sweeping through the financial sector – one that will benefit both their businesses and their respective industries. However, with a future that entails more transformation to come, this confidence meets some uncertainty as to where open banking is headed and which archetypes will stand the test of time. Those who translate the opportunity of open banking into a clear strategy will be in the best position to start realising its benefits. Here are some reflections on how to get there.

Adopt use cases to enhance the customer experience

As financial institutions embark on their open banking journeys, it’s now time to move beyond compliance efforts. If the movement is indeed the revolution that executives claim, the risk of doing nothing may be bigger than the risk of failing and trying again. Sharing the value chain takes time and may potentially fail to deliver the results that have been promised. This is why ‘Enhanced banking’ is the safest and most strategic direction a financial institution can take today. With nearly 500 European TPPs creating customer value, executives can look for inspiration on how they leverage open banking to improve the experience across different stages of the customer journey. There are already millions of people enjoying open banking enabled services, without even knowing it — be it by setting up a direct debit mandate in just a couple of seconds, or aggregating their financial lives into a single overview.

Don’t go looking for the killer app

If open banking may still take decades to mature, the killer app that will revolutionise the industry may still be out there. With so much excitement over the prospects of open banking, it’s important to keep in mind that using open banking to reinvent a process or launch a new service can be risky and should only be considered if the low-hanging fruits have already been picked. Open banking use cases such as real-time insurance services or receipt management have not necessarily been proven yet, but automated onboarding, income verification and personal finance management have. Ultimately, open banking is all about enabling data-driven banking. Executives therefore should explore how the usage of the customer’s financial data can help improve, accelerate, and streamline decision-making processes, risk analyses, and the verification of identity, assets and liabilities.

Partner for quick access to open banking capabilities

While financial institutions have obtained many new skills and knowledge about open banking, APIs, and cloud computing, the speed of innovation continues to be inhibited by forces of legacy, culture, and compliance processes. Financial institutions looking to pursue open banking innovation programmes should always consider partnering with fintechs rather than developing these competences in-house. These partnerships can be incredibly strategic for both partners, but it is important to evaluate a potential partner’s technology offering as well as its ability to deliver the support, security, and integrity a regulated institution requires.

About this research

For the third year in a row, Tink enlisted the help of independent market research organisation YouGov to conduct a wide-ranging survey on the attitudes and opinions towards open banking in Europe. All interviews were conducted by YouGov between February 25 and March 27, 2021, and included 308 prominent financial services executives spread across 12 countries. The participants answered questions through telephone interviews and an online questionnaire (all in local languages, to improve the validity of responses). In order to be selected for the survey, participants needed to be i) senior decision makers or influencers, ii) employed by a regulated financial institution, iii) have confident knowledge of PSD2, and iv) have insight into the open banking investment plans. For more details into the demographics, check the full report

About Tink

Tink is Europe’s leading open banking platform that enables banks, fintechs and startups to develop data- driven financial services. Through one API, Tink allows customers to access aggregated financial data, initiate payments, enrich transactions, verify account ownership and build personal finance management tools. Tink connects to more than 3,400 banks that reach over 250 million bank customers across Europe. Founded in 2012 in Stockholm, Tink’s 400 employees serve more than 300 banks and fintechs in 18 European markets, out of offices in 13 countries. We power the new world of finance.

Want to get more insights, and additional input from the Tink CEO and other industry leaders? Download the full survey report for a more in-depth analysis of the results, and exclusive executive interviews. For more results from our 2021 survey, check the report we released earlier this year, exploring the role of open banking in the post-pandemic world. And stay tuned for a third report coming later this year.

Join the revolution

We’ve been at this whole open banking thing for a while, yet we never tire of talking about it. If you have any questions, ideas, or just want to learn more or geek out about all the possibilities it brings – reach out for a chat:

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