Finastra Global Survey Shows Appetite for Open Banking Picking up Pace Worldwide

LONDON, May 26, 2020 /PRNewswire/ -- Finastra research reveals that 86% of global banks are looking to use open APIs to enable Open Banking capabilities in the next 12 months. In addition, 30% of banks surveyed believe Open Banking is already making a tangible impact in delivering improved overall customer experience. This is against a backdrop where regulation is perceived to be tighter than a year ago and close to half (48%) of those audited believe that regulators are holding back innovation.

The research, which was conducted prior to the Coronavirus outbreak amongst 774 financial institutions and banks across the US, UK, Singapore, France, Germany, Hong Kong and UAE(1), shows a maturity of API adoption and calls for the harmonization of regulations between geographies.

Key findings include:

    --  Open banking is on the up in 2020 compared to 2019(2): The percentage of
        financial institutions looking to leverage open APIs has substantially
        increased in the US (+23%) and UK (+17%), while Singapore (+1%), France
        (-1%) and Germany (-4%) are relatively stagnant since our research in
        2019.
    --  Improvements in the overall customer experience accelerate API adoption:
        The US (45%), Hong Kong (42%) and France (36%) are leading the way in
        harvesting this benefit of Open APIs (UAE: 32%; Germany: 20%; Singapore:
        20%; UK: 19%). Overall, 41% of global banks say that they are 'still in
        the early stages of adoption', so it's difficult to measure the impact
        of Open Banking on their business so far.
    --  Regulation is perceived to be tighter than a year ago and industry or
        government support is required to foster innovation: Almost half of
        those audited believe that regulations are holding back innovation. 48%
        state that 'regulation is too tight' - 10% more than 2019 - and the same
        percentage (48%) believe there is 'not enough government or industry
        support to foster innovation', particularly so in Hong Kong (62%),
        France (50%) and Singapore (49%), compared to 38% in the UK.
    --  A call for harmonization: 83% of financial institutions and banks agree
        that regulations regarding fintech innovation should be harmonized
        across different geographies.
    --  Cost of fintech research and development is of concern in some regions:
        Cost of R&D in the US, UAE and APAC regions is highlighted, more so than
        in the UK. (USA: 55%; Hong Kong: 55%; Singapore: 51%; UAE: 46%; France:
        43%; Germany: 34%; UK: 33%).

Simon Paris, CEO at Finastra said, "It's encouraging to see Open Banking maturing on a global scale, but it's still seen by many to be in its teenage years, with scope for creating even greater opportunities. We believe it will be the first step towards Open Finance which will see the next wave of innovation in financial services being created through collaboration on open platforms, like FusionFabric.cloud, using open APIs and open software solutions.

"Currently banks and technology vendors are rightly focused on business continuity and keeping their workforces safe. We've also seen many of these firms moving with amazing pace to bring innovative solutions to market, with the help of technology, to support customers in this new environment. As we come through this situation together, we must endeavor to emerge stronger, and it will be interesting to see how Open Banking and collaboration accelerate when this outbreak ends."

To see the findings summary report, click here

Notes to editor:

    1. Research was conducted online at the end of January 2020, amongst 774
       financial institutions and banks across United States, UK, Singapore,
       France, Germany, Hong Kong and UAE. These financial institutions
       represent a gross total of just over USD$4.7 trillion in turnover over
       the last 12 months, employ over approximately 4.9 million staff and have
       approximately 110 million client/customer/member relationships.
    2. Comparative analysis was made from results from a similar survey run by
       Finastra in 2019 which was also conducted online in the UK, US,
       Singapore, France and Germany (March - May 2019).

Definitions used in the survey:

    --  Open Banking: Open Banking is a series of reforms to make the banking
        sector more competitive. It brings changes to how banks handle their
        customers' financial information, putting control back in the hands of
        the customer. It means that customers can opt to share their financial
        information with authorized providers, to gain access to new services
        and innovation to help them manage their money better.
    --  Open application programming interfaces (open APIs): A computing
        interface to a software component or a system, that defines how other
        components or systems can use it. Aids open access for developers to
        build software.
    --  Fintech collaboration: The collaboration between financial institutions
        or banks with technology providers to help improve the customer
        experience while also reducing operational cost.

About Finastra

Finastra is building an open platform that accelerates collaboration and innovation in financial services, creating better experiences for people, businesses and communities. Supported by the broadest and deepest portfolio of financial services software, Finastra delivers this vitally important technology to financial institutions of all sizes across the globe, including 90 of the world's top 100 banks. Our open architecture approach brings together a number of partners and innovators. Together we are leading the way in which applications are written, deployed and consumed in financial services to evolve with the changing needs of customers. Learn more at finastra.com

For further information please contact:

Caroline Duff
Global Head of PR
T +44(0)20-3320-5892
E caroline.duff@finastra.com

finastra.com

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SOURCE Finastra