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Appetite for Open Banking picking up pace worldwide, Finastra survey shows

Tuesday 26 May 2020 10:58 CET | News

Finastra research has revealed that 86% of global banks are looking to use open APIs to enable Open Banking capabilities in the next 12 months.

Moreover, 30% of banks surveyed believe Open Banking is already making a tangible impact in delivering improved overall customer experience. This is against a backdrop where regulation is perceived to be tighter than in 2019 and close to half (48%) of those audited believe that regulators are holding back innovation.

Key findings include:

  • Open banking is on the up in 2020 compared to 20192: The percentage of financial institutions looking to leverage open APIs has substantially increased in the US (+23%) and UK (+17%), while Singapore (+1%), France (-1%), and Germany (-4%) are relatively stagnant since our research in 2019;
  • Improvements in the overall customer experience accelerate API adoption: the US (45%), Hong Kong (42%), and France (36%) are leading the way in harvesting this benefit of Open APIs (UAE: 32%; Germany: 20%; Singapore: 20%; UK: 19%). Overall, 41% of global banks say that they are ‘still in the early stages of adoption’, so it is difficult to measure the impact of Open Banking on their business so far;
  • Regulation is perceived to be tighter than in 2019 and industry or government support is required to foster innovation: Almost half of those audited believe that regulations are holding back innovation. 48% state that ‘regulation is too tight’ - 10% more than 2019 - and the same percentage (48%) believe there is ‘not enough government or industry support to foster innovation’, particularly so in Hong Kong (62%), France (50%), and Singapore (49%), compared to 38% in the UK;
  • A call for harmonisation: 83% of financial institutions and banks agree that regulations regarding fintech innovation should be harmonized across different geographies;
  • Cost of fintech research and development is of concern in some regions: Cost of R&D in the US, UAE and APAC regions is highlighted, more so than in the UK. (USA: 55%; Hong Kong: 55%; Singapore: 51%; UAE: 46%; France: 43%; Germany: 34%; UK: 33%). 
The research, which was conducted prior to the Coronavirus outbreak amongst 774 financial institutions and banks across the US, UK, Singapore, France, Germany, Hong Kong, and UAE, shows a maturity of API adoption and calls for the harmonisation of regulations between geographies.

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Keywords: Finastra, Open Banking, study, fintech, APIs, standards, banks, global
Categories: Banking & Fintech | Payments General
Countries: World
This article is part of category

Banking & Fintech