There’s an active adoption of open finance globally, while open banking has already become an industry norm
Labelled as an extension of the open banking model, open finance becomes more mainstream. Source: shutterstock.com
A new survey from Finastra revealed that 94% of financial institutions regard open finance as either a ‘must have’ or ‘important’ in the context of data sharing. Meanwhile, open banking acceptance as a key part of banks’ operations has grown to 99%.
Labelled as an extension of the open banking model, open finance includes a wider range of financial products and services into the transformative impact of third-party data sharing. Namely, besides bank account details, trusted APIs may get access to financial data such as mortgages, savings, pensions, insurance and consumer credit.
The researchers surveyed 758 professionals (at the managerial level) from financial institutions and banks across France, Germany, Hong Kong, Singapore, the UAE, the UK and the US. It discovered that 48% of respondents consider open finance a ‘must have’, compared to 38% in 2021.
Furthermore, 85% of professionals agree that open finance is already making the industry more collaborative, illustrating a positive impact on the financial services sector.
The growing appetite for the technology is particularly pronounced in the UAE (up from 50% in 2021 to 71% this year), the UK (up from 33% to 47%) and the US (up from 45% to 56%). These countries are now most actively investigating products and services to boost their FS ecosystem.
Additional findings
As for the other insights, the study also found that BaaS and embedded finance are already an industry norm, being expected/demanded by customers. The majority of organisations (86%) agree that the financial services and banking sector must support ESG initiatives.
Besides, financial companies are continuously moving their operations to the cloud. Half of the institutions now have all or most of their software stack on cloud-based solutions, while a further third (32%) split software equally between cloud and on-premises solutions.
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