The global open banking market is on track to exceed $123 billion by 2031, according to projections from Allied Market Research. This figure represents a compound annual growth rate of roughly 27% from current levels. Open banking, once a regulatory experiment confined to the United Kingdom and European Union, has become a global movement reshaping how financial data flows between institutions, fintech companies, and consumers.
The concept behind open banking is straightforward. Banks share customer financial data, with customer permission, through secure application programming interfaces. Third-party companies then use that data to build products and services that compete with or complement what banks offer. The result is a more competitive financial services market where innovation happens faster and customers have more choices.
How Open Banking Reached Global Scale
The United Kingdom launched the first comprehensive open banking framework in 2018, requiring the nine largest banks to share data through standardised APIs. The European Union followed with the second Payment Services Directive, known as PSD2, which extended data-sharing requirements across the bloc. These regulatory mandates created the foundation for a new financial ecosystem.
What started as a European initiative has spread worldwide. Australia implemented its Consumer Data Right framework, beginning with banking data. Brazil launched its open banking programme in phases starting in 2021, eventually expanding it to open finance, which includes insurance, investments, and pensions. India’s Account Aggregator framework enables consent-based data sharing across financial institutions. Nigeria, Saudi Arabia, and several Southeast Asian countries have announced or implemented their own open banking regulations. Research shows that reflecting the accelerating pace of adoption. Research shows that reflecting the accelerating pace of adoption.
The regulatory approach varies by country. Some markets, like the UK and Australia, mandate open banking through legislation. Others, like the United States, rely on market-driven adoption, where companies negotiate data access agreements without government mandates. Both approaches are producing results, though mandated markets tend to see faster adoption of standardised APIs.
What Is Driving the Growth
Several factors are pushing the open banking market toward the $123 billion projection. First, the number of API calls is growing exponentially. In the UK alone, the Open Banking Implementation Entity reported that the number of API calls exceeded 1 billion per month in 2024, up from roughly 66 million per month in 2019. Each API call represents a data exchange that supports a financial product or service.
Second, the range of use cases is expanding. Early open banking applications focused on account aggregation, allowing customers to see all their financial accounts in one place. The market has since expanded to include payment initiation, credit scoring, identity verification, personal financial management, and automated accounting. Business banking applications are growing particularly fast, as small and medium enterprises use open banking tools to manage cash flow, automate invoicing, and access working capital.
Third, consumer awareness and adoption are increasing. A study by PwC found that open banking awareness among consumers has roughly doubled in most major markets over the past three years. As more people use fintech products that rely on open banking data, the infrastructure becomes more embedded in everyday financial activity.
The Revenue Opportunity
Open banking generates revenue through several channels. API providers charge fees for data access. Fintech companies monetise the products they build on top of open banking data. Banks earn revenue by offering premium data services and by participating in new financial ecosystems. At the transaction level, as API-driven finance goes mainstream. At the transaction level, as API-driven finance goes mainstream.
Payment initiation is one of the largest revenue opportunities. Open banking payments allow consumers and businesses to pay directly from their bank accounts, bypassing traditional card networks. This reduces transaction costs for merchants and creates a new payment rail that competes with Visa, Mastercard, and other card schemes. In Europe, open banking payment volumes have been growing at over 50% annually.
Lending is another significant revenue driver. Open banking data gives lenders a more complete picture of a borrower’s financial health. Instead of relying solely on credit bureau data, lenders can analyse real-time bank transaction data to assess income stability, spending patterns, and existing obligations. This enables more accurate risk assessment and allows lenders to serve customers who might be overlooked by traditional credit scoring methods.
Challenges Facing the Market
Despite the growth trajectory, open banking faces significant challenges. Data quality and API reliability remain inconsistent across markets. Some banks provide comprehensive, well-structured data through their APIs, while others offer limited data sets with frequent downtime. This inconsistency makes it difficult for fintech companies to build reliable products that work across all banks.
Security and privacy concerns persist. Sharing financial data through APIs creates new attack surfaces that need to be protected. Regulators and industry participants are working to establish strong authentication standards and data protection frameworks, but the landscape is still evolving. Consumer trust in data sharing varies significantly by market and demographic.
The commercial model for open banking is still maturing. In mandated markets, banks are required to provide data access for free or at minimal cost. This creates tension between the regulatory goal of promoting competition and the banks’ need to earn returns on their technology investments. Finding sustainable commercial models that work for all participants remains a work in progress.
What Comes Next
The evolution from open banking to open finance is already underway. Several markets are extending data-sharing frameworks beyond banking to include insurance, pensions, investments, and other financial products. This broader scope creates new opportunities for integrated financial management tools and cross-product innovation.
The $123 billion market projection reflects the compounding effect of regulatory expansion, technological maturation, and growing consumer adoption. As more countries implement open banking frameworks and existing markets deepen their adoption, the financial data ecosystem will become increasingly central to how financial services are delivered globally. The companies and institutions that build the most effective products on this infrastructure will capture a significant share of the market opportunity.
