Page 1 - GS210502_flipbook

May 24, 2021 • Issue 21:05:02

Open banking and the changing

payments landscape

Lee Wetherington, senior director of strategy and Jack Hen-
ry & Associates, said the "major difference is that our flavor
of open banking in the U.S. is market driven so far.

Chris Van Der Stad, senior vice president at Fiserv, added,
"It's a conceptual framework to ensure consumers and busi-
nesses get direct access to [consumers' financial] data. Pay-
ments is encompassed in that. Payments will get more effi-
cient and richer." He additionally noted that consumer-per-
missioned real-time access to data provided through open
banking also will enhance fraud detection and prevention.

At the heart of open banking are application programming
interfaces (APIs), specifically open APIs, which are publicly
available and govern how applications communicate with
each other. "Open banking offers expanded capabilities for
customers through APIs [that link] between financial in-
By Patti Murphy stitutions and [nonbank] financial services providers," said
Jack Baldwin, CEO at BHMI.
he open banking market, while nascent, is grow-
ing at a rapid clip. Allied Market Research The practical implications are potentially enormous. A re-
reported the global market is charting a com- cent survey by the German open banking company Mambu
T bined annual growth rate of 24.4 percent and is found that globally 54 percent of consumers use between
expected to reach $43.15 billion by 2026. one and three finance apps, while nearly 20 percent are us-
ing five or more.
To put this into perspective, Grandview Research estimat-
ed the global ATM market is expanding at a 10.1 percent When consumers use one of these (such as the personal fi-
CAGR and will reach $24.9 billion in 2022. This may not nancial management app Mint), they share login informa-
be an apples-to-apples comparison, but if money spent is tion for their various financial accounts with the app which
an indicator, the comparison illustrates the value financial
institutions and financial technology firms place on sup-
porting the migration to open banking.
Contributed articles inside by:
What is open banking?
Anthony Malatesta ...............................................................................18
Open banking can mean different things to different peo- John Tucker ............................................................................................28
ple in different countries. "The focus in the EU and the UK
is really more around consumers because of regulation Elaina Smith ............................................................................................30
there and [the need to support] consumers owning their
own data," said Joe Spatarella, chief client success officer at Roger McNamara ..................................................................................32
Prolific Banking Inc., which develops open banking solu- TOC on page 3
tions focused on commercial banking applications. "In the
U.S. it's going to be a very different thing."
Continued on page 26