Market Trends of Open Banking Industry
Open Bank Users Growth is Propelling in Asia-Pacific
In the Asia-Pacific region, the growth of open banking users is driven by factors such as increasing digitalization, evolving consumer preferences, and innovation in the financial sector. While several nations, such as South Korea, Japan, Singapore, and India, have less formal or mandatory Open Banking policies, their governments are implementing several initiatives to encourage and hasten the adoption of data-sharing frameworks in the banking industry. An API Playbook has been released in Singapore by MAS and the Association of Banks to facilitate communication and data sharing between banks and Fintechs. The FSA in Japan has imposed requirements on banks to disclose their Open APIs policy, created a procedure for TPP authorization, and encouraged banks to enter into contracts with a minimum of one TPP.
Rise in Payments is Fuelling the Market
The market for open banking is expanding due to the rapid growth of digital payments. The open banking sector is growing as a result of the increase in the use of online payment platforms. Conventional payment methods such as credit cards frequently entail middlemen and extra charges. However, open banking empowers customers to initiate payments directly from their bank account, bypassing intermediaries and reducing transaction costs. This process benefits consumers and encourages competition among payment service providers, leading to the development of innovative payment solutions. Moreover, open banking enables faster payment processing, ensuring that transactions are completed swiftly and efficiently. Overall, the rise in payments is a driving force behind the expansion and adoption of open banking.
