In the financial world, open banking has emerged as a game-changer, enabling innovation and competition like never before.
A recent study by Konsentus, a leading open banking-based Software-as-a-Service platform, sheds light on the global spread of open banking initiatives.
It’s an exciting journey that showcases how the financial industry is transforming to meet the digital age.
Let’s delve into the key findings of this study and understand what this means for the future of finance.
Open Banking Goes Global
Open banking is no longer a niche concept confined to a handful of forward-thinking countries.
According to Konsentus’ study, there are now more than 65 national open banking programs worldwide.
This global phenomenon has swept across 68 countries, encompassing a remarkable 35% of the world’s nations.
It’s a testament to the growing importance of open banking in the global financial digitization agenda.
Regulation: The Driving Force
One striking aspect of the study is the strong regulatory push towards open banking.
In fact, 64% of the initiatives are made mandatory through legislation, highlighting the pivotal role of governments in driving this transformation.
While only four markets are taking a market-led approach, a significant 26% of initiatives lack formal regulation but enjoy robust regulatory support and a centralized program approach.
A Diverse Landscape
One size doesn’t fit all when it comes to open banking.
The study reveals a diverse landscape with varying approaches to implementation.
A hybrid approach is gaining traction, especially in Asia.
Each jurisdiction is charting its unique path, recognizing that the flexibility to adapt to specific needs and circumstances is crucial for success.
The Eastern Europe and Central Asian Network (EECAN)
While open banking is making waves across the globe, the Eastern Europe and Central Asian Network (EECAN) stands out as a region to watch.
More than 50% of the 14 countries in this region have either a live or active open banking program.
It’s a sign that this part of the world is embracing the future of finance with open arms.
Expanding Horizons: Open Finance and Open Data
For countries where open banking is no longer breaking news, the focus is shifting towards expanding the scope to include open finance and open data.
This means enabling third parties to access a broader range of financial information, including insurance and investments.
It’s a natural evolution of open banking, making it more comprehensive and inclusive.
The Future of Open Banking
Konsentus CEO Mike Woods believes that the growth of open banking is far from over. He anticipates that the number of countries adopting open banking will continue to rise, with testing and implementation becoming more intense in the coming years. This is a clear sign that open banking is here to stay, and it’s set to revolutionize the way we manage our finances.
In conclusion, open banking has transcended borders and is now a global phenomenon. It’s reshaping the financial industry, driven by regulation, and adapting to the unique needs of each region.
As we look to the future, the expansion of open banking into open finance and open data is a natural progression, promising more convenience and innovation for consumers worldwide.
The journey has just begun, and the world of finance is in for an exciting transformation.