mmob’s most recent whitepaper, written by our COO James Fell, investigates the opportunities of Open Banking and Open Finance globally. This blog highlights how fintech growth has been driven globally and how Open Banking and Open Finance might be realised.
Global movement of fintech
The convergence of complex digital lives, adoption of digital payments and the democratisation of data is seeing customers opt, en masse, to trusted platforms for managing their finances. By 2022, the global fintech industry is expected to be worth £242.5bn, demonstrating impressive annual growth to date of 24.8%.
Key factors driving fintech’s growth are summarised as:
- Ability to attract investment, with global economic uncertainty not preventing strong investment within Fintech
- Talent acquisition and retention is a key driver of Fintech success, with companies hiring internationally to overcome digital skills shortages
- Evolving financial behaviours, migrating to digital experiences, have been accelerated in response to COVID-19, creating unrivalled demand for Fintech
- Established players looking to collaborate is giving Fintech’s the platform to scale quickly and generate the traction required to push forward
- Progressive regulators promoting innovation via regulatory sandboxes have give Fintech’s autonomy, and confidence, to test safely within closed settings
Where Covid-19 has created uncertainty and undue operating pressures for FinTech’s, actions taken by global economies to react and recover from the coronavirus pandemic have also created substantial opportunities. For customers, there has never been an event more compelling, creating unpreceded demand for innovative solutions wanting to improve their financial lives.
Whilst adoption of digital payments has driven the majority of fintech growth, Open Banking is rapidly gaining pace, expected as a standalone industry to be worth £33.3bn by 2026. Adoption of Open Banking practices, however, is not homogenous globally, with specific regions being more progressive than others launching Open Banking initiatives.
Europe’s initiation of Open Banking, powered by the UK’s Open Banking Standard, truly established the opportunity. Countries, regardless of regulatory stance, being either “market-driven” e.g., USA or “regulatory-driven” e.g. the UK, have either consulted or looked to replicate the European approach. This trend creates bountiful opportunities for UK and EU regulated entities pursuing global growth, allowing easier deployment and regulatory engagement within foreign markets.
To download the full paper, click here.