While there is plenty of excitement about its potential, in reality the take-up of open banking by end users globally is still relatively slow and will require greater standardization and target market education before it delivers.
According to Allied Market Research, the open-banking market will grow by around a quarter every year between 2018 and 2026. However, there is a lot of work to be done before it becomes ubiquitous, even in the most mature markets.
The first challenge is one of standardization. While open banking is underpinned by API (application program interface) technology, the lack of an industry standard with an associated common implementation guideline is proving problematic.
Many banks are already moving from simpler use cases such as account aggregation into cash management and FX
“At the moment, there is divergence within the industry around the actual message structure, which introduces additional complexity and cost for providers,” says Mark Sutton, open-banking specialist at treasury consultancy Zanders.
“More needs to be done by firms and regulators to raise awareness and reach scale, even in jurisdictions such as the UK where regulations are already in place.”
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