Finastra global survey shows appetite for Open Banking picking up pace worldwide

Finastra global survey shows appetite for Open Banking picking up pace worldwide
26.05.2020 11:24 am

Finastra global survey shows appetite for Open Banking picking up pace worldwide

Open Banking

Finastra research reveals that 86% of global banks are looking to use open APIs to enable Open Banking capabilities in the next 12 months. In addition, 30% of banks surveyed believe Open Banking is already making a tangible impact in delivering omproved overall customer experience. This is against a backdrop where regulation is perceived to be tighter than a year ago and close to half (48%) of those audited believe that regulators are holding back innovation.

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 UAE1, shows a maturity of API adoption and calls for the harmonization of regulations between geographies.

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’s difficult to measure the impact of Open Banking on their business so far.

·       Regulation is perceived to be tighter than a year ago 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 harmonization: 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%). 

 

Simon Paris, CEO at Finastra said, “It’s encouraging to see Open Banking maturing on a global scale, but it’s still seen by many to be in its teenage years, with scope for creating even greater opportunities. We believe it will be the first step towards Open Finance which will see the next wave of innovation in financial services being created through collaboration on open platforms, like FusionFabric.cloud, using open APIs and open software solutions.

“Currently banks and technology vendors are rightly focused on business continuity and keeping their workforces safe. We’ve also seen many of these firms moving with amazing pace to bring innovative solutions to market, with the help of technology, to support customers in this new environment. As we come through this situation together, we must endeavor to emerge stronger, and it will be interesting to see how Open Banking and collaboration accelerate when this outbreak ends.”

 

To see the findings summary report, click here

 

_____________________________________

1.     Research was conducted online at the end of January 2020, amongst 774 financial institutions and banks across United States, UK, Singapore, France, Germany, Hong Kong and UAE. These financial institutions represent a gross total of just over USD$4.7 trillion in turnover over the last 12 months, employ over approximately 4.9 million staff and have approximately 110 million client/customer/member relationships.

2.     Comparative analysis was made from results from a similar survey run by Finastra in 2019 which was also conducted online in the UK, US, Singapore, France and Germany (March - May 2019).

Related News

Salt Edge Joins SME Finance Forum Global Network

Salt Edge, a leader in developing open banking solutions, becomes a member of the SME Finance Forum. It was established by the G20 Global Partnership for... Read more »

Bottomline boosts the way businesses collect cash with Pay Direct

Bottomline (NASDAQ:EPAY), a leading provider of financial technology that makes business payments simple, smart and secure, today announced the launch of Pay... Read more »

BNP Paribas Personal Finance collaborates with Experian and Aryza to help customers through the Covid-19 pandemic

BNP Paribas Personal Finance will use Experian’s Open Banking technology and Aryza’s Debtsense digital platform to provide... Read more »

Nuapay brings Open Banking to 190M French accounts

Open Banking pioneer Nuapay, a Sentenial company, today announces it has extended its Open... Read more »

Konsentus partners with Open Vector as open banking accelerates in Latin America

Konsentus announced that it has partnered with open banking advisory company Open Vector to enable Financial Institutions in Latin America and... Read more »

Mode introduces next-gen bank transfers powered by ‘Open Banking’ technology

Mode, the new breed digital banking app, has extended its partnership with payments provider Modulr to launch its first feature powered by ‘Open Banking’, as... Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel