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Open Banking relevant to 78% of fintechs, says Discover Global Network

Wednesday 26 October 2022 11:01 CET | News

A study by 451 Research commissioned by Discover Global Network has identified trends shaping the fintech ecosystem: connected commerce, Open Banking, embedded finance, and real-time payments.

 

Based on the ‘Fintech State of the Union’ study, Open Banking has been found ‘relevant’ to their business by 78% of fintechs, a sentiment caused most likely by the positive consumer reaction experienced by fintech institutions regarding Open Banking. The Discover and 451 research revealed that 68% of consumers prefer Open Banking due to the fact that it results in expedited credit approvals. Additionally, 6 in 10 fintechs (63%) have expressed an interest in partnering up with a payment network with the scope of developing Open Banking solutions. Discover officials have stated that fintechs are on a constant lookout for new ways of innovating and delivering to their customers, the study having revealed that some of the most predominant emerging trends in 2022 are Open Banking and connected commerce. 

When it comes to what the customer sentiment is, the research revealed that 87% of US consumers have at least one fintech app on their smartphone, with 49% having three or more, a considerable increase from the 36% in 2021. Representatives from 451 Research have stated that the digital acceleration that occurred during the pandemic led to the adoption of current-generation experiences such as digital wallets and Buy Now, Pay Later (BNPL). This has created a foundation for further development when it comes to increasing consumer comfort when handling finances digitally and through different intermediary types. 

A study by 451 Research commissioned by Discover Global Network has identified trends shaping the fintech ecosystem.

Key research findings

  • Open Banking is a priority for fintechs and consumers alike. Almost 80% of fintechs (78%) find Open Banking relevant for their business, with 63% stating that it is the predominant area where they are interested in partnering with a payment network. When it comes to consumers, the use cases that garnered the most interest are fastened credit approval receival (68% expressing interest), and receival of a consolidated view of financial accounts (68%).

  • Fintechs see payment networks as strong partners when it comes to the development of emerging payment experiences. When it comes to payment experiences that are relevant to their business, 62% of fintechs show interest in developing Open Banking solutions alongside a payment network, 60% show interest in developing cryptocurrency solutions, and 60% expressed interest in partnering with payment networks and working towards the development of embedded finance/Banking-as-a-Service (BaaS) solutions.

  • Embedded finance and Banking-as-a-Service (BaaS) drive collaboration opportunities for banks and fintechs. Three in four fintechs (75%) find embedded finance/BaaS relevant for their business. From the consumer side, six in ten expressed their interest in loyalty programmes that gives them access to personalised options, rising to 75% of Gen Z and Millennials alike. 

  • Both consumers and fintechs see an opportunity for payments integration into commerce experiences. Two thirds of consumers (66%) have expressed interest in paying for purchases automatically as they walk out the store, and 58% were interested in having connected devices make purchases automatically, on their behalf.  Almost eight in ten fintechs (79%) indicated that connected commerce is of high relevance for their business.

The research was commissioned by Discover Global Network and conducted by 451 Research, part of S&P Global Market Intelligence, an independent research firm, in Q2-Q3 2022, and it surveyed 4,037 consumers and 852 fintech vendors in VP, C-suite and founder roles. Amongst the markets surveyed, the following were included: Canada, China/Hong Kong, Germany, India, Singapore, the UK, and the US.


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Keywords: research, Open Banking, embedded finance, embedded payments, BaaS, ecommerce, digital wallet, digital payments
Categories: Banking & Fintech
Companies: 451 Research, Discover Global Network
Countries: World
This article is part of category

Banking & Fintech

451 Research

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Discover Global Network

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