It’s often said that numbers don’t lie, and that’s true almost all the time, especially when you consider the financial sector. By glossing over the statistics of Open Banking in the last few years and analyzing the future trends, we can make insightful predictions and forecast the changes and/or future tendencies for the sector. As a relatively new and always growing and changing part of the financial sector, Open Banking revolves around technological progress and collaboration between financial institutions and tech companies. So, what about the numbers and what about Open Banking statistics of 2020, 2021 and the future?
In 2020, according to the data, provided by Statista, there were over 25 million users of Open Banking services worldwide. Europe is the leader in this field, housing nearly half of them. Due to suitable local and EU legislative regulations, companies are able to not only start providing Open Banking services but also successfully implement them.
Most of Open Banking companies are founded and located in Europe, meaning that the Old Continent proves to be the hub and main innovator when it comes to Open Banking and solidified its role in the year 2020.
Looking at other statistics, we can also see great improvements in terms of API call response times. When calls are made using the ASPSP’s, the average response time was reduced, on average, by >20%, meaning improved overall functionality and much smoother operation for the service provider and the client.
There are also more businesses who are trying to break their way into the market. The UK, alone, issued close to 200 3rd party licenses for Open Banking APIs in 2020. This number shows that both the EU and economically prosperous European countries are getting more and more involved with the concept of Open Banking and the market is adopting it at a pace that’s rapidly growing.
As 2020 showed, the leading countries in Open Banking innovation are all European. The report, compiled by McKinsey & Company showed that the global leader in Open Banking is and remained the United Kingdom with 3 to 5 times more licenses issues for APIs, when compared to its closest competitors – Germany and Sweden. While both of the latter are making huge strides and house some of the world’s most successful service providers and their affiliates, the United Kingdom is just miles ahead at this point.
France, the Netherlands and Lithuania round out the top 5 of open-banking leaders worldwide. Everyone, apart of the United Kingdom, are members of the European Union. However, the US and ASEAN countries like Singapore are also inching closer towards improving their own domestic Open Banking sectors.
In 2020, yet another major tendency occurred. Non-banks became much more involved with financial-services. Google has the Plex, there’s also Grab and many more. Once tech companies can get involved into the financial sector, Open Banking could really take off. And Open Banking statistics for 2020 show that this is a real possibility.
Finally, a worthwhile point of discussion is that there was a huge momentum gain for the API economy and hence, the issue for monetization of APIs has risen. Regulators were now thinking about whether to implement a price-per-call module or leave the APIs as free access tools. Whilst monetization from regulators is never something that businesses are willing to meet with open arms, in 2020, the general mood of service providers in the field was positive, looking at a proper monetization model as a caterer and the foundation for a harmonious competition amongst all of participants in the market.
Nordigen can offer you free but also premium data & insights into Open Banking statistics for 2021 as well as the option to connect to more than 2,000 banks in Europe. This just shows how much the sector has grown and how impactful, implementation of Open Banking, can really be.
For 2021, it seems that Europe maintains a strong foothold on the market with 40-50% of all total users of Open Banking service being located there. In terms of Open Banking adoption statistics, there was even more significant growth both in Europe and worldwide.
Latin America gained 400 thousand new users, 600 thousand new users in North America and 2.6 million new users in Far East & China means that the sector grew not only in Europe but in every single continent.
Whilst 2020 was considered a milestone year of Open Banking with funding numbers rising by 70+%, 2021 promises to show more of the same with Open Banking statistics for 2021 indicating that financing for companies in the sector should see a stable 8-12% increase over the previous year. The same tendencies were visible the year prior, meaning that the global pandemic hasn’t slowed the growth of the sector as it remained steady. Such figures indicate steadiness and self-sustainability of the entire sector, despite even negative macroeconomic tendencies such as a global pandemic.
Analysts say and Open Banking adoption statistics show that this particular service is steadily becoming a catalyst to the evolution of the entire finance sector.
There are also talks that with the likely coming of new regulations, banks are the ones with the most benefits to gain, if they decide to act on it. Thanks to huge user-bases and the already-existing foundation for financial service provision would require much less work, carrying over from the traditional, to the Open Banking model. However, most banks are known to be very cautious when it comes to innovation, hence, expecting them to be at the forefront of financial evolution is highly doubtful.
In Open Banking, as with any other sector that’s involved with technology, controlling information and data is key. And since banks and tech giants like Google, Apple, Facebook and others are the key Big Data powerhouses, any move that these Silicone Valley giants make, will have significant impact to the whole sector.
But for the near future, Open Banking statistics and overall tendencies in the market show that we can expect the EU to remain the clear-cut leader for the foreseeable future.
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