Open Banking on the rise internationally according to CBI and PwC who publish the first “Global Open Banking Report”

Open Banking is a growing trend at international level: to date, more than 60 countries launched  initiatives: in some cases, directly by the local Regulator (e.g. FCA in the UK, European Commission in  the EU, ACCC in Australia), in other cases, by market players (e.g. USA).

These are some of the findings of the first “Global Open Banking Report”, presented today in Rome by CBI, the collaborative hub for technological innovation and digitalization of the financial industry, and  PwC Italy, which provides a complete picture of the state of the art of Open Banking, highlighting  potential trends and future developments in the Italian and global market.

The Global Open Banking Report includes an in-depth analysis on Open Banking initiatives at global  level (12 countries in addition to European Union considered), provides an overview on European API based services offering from 41 leading European players (Traditional Banks, Digital Banks, FinTech &  Tech Providers), investigates the role of 14 European Collaborative and/or Standardization Initiatives  and provides key insights on Open Banking state of the art in Italy through a survey addressed to 13 key  financial institutions.

The Report reveals that, at European level, the adoption of PSD2 has undoubtedly laid the foundations  for the development of Open Banking, stimulating competition in the financial services market and  opening the doors to new players, thus contributing to an enrichment of the banking offering for customers.

Open Banking relevance is confirmed by some important indicators that attest to the dynamism of the  market: in addition to the almost 4,000 Accounting Servicing Payment Service Providers (ASPSP), the  number of Third-Party Providers (e.g. IP/IMEL offering Account Information and Payment Initiation  services) is growing, currently around 500 (+300% from 2019). In 2021, the number of acquisitions in  the Open Banking area (e.g. Mastercard-Aiia) will reach around 2 billion €. With regard to the API based services offering, the study conducted on 41 market players reveals that, 63% of the 2,400 total  APIs, relies on PSD2 data relating to Account Information (AIS) and Payment Initiation (PIS). To a  lesser extent (14%), services based on investment, loan or insurance data are beginning to emerge.

According to CBI and PwC, the adoption of Open Banking services in Italy is still lower than in other  European areas (e.g. Nordics). A survey conducted on the main Italian banks outlines the key services  that make up the Open Banking offering in the current national context: Account Aggregation (55%),  Check IBAN (45%), Personal Financial Management (36%), Instant Payment (27%) and Identity &  Digital Onboarding services (18%). Going forward, Digital ID & Onboarding services (64%) and Check  IBAN (55%) are the VAS that banks say they will focus on.

The survey also showed that, although in the last 5 years Italian banks have made significant  investments to comply with PSD2 (over 2.5M€ per bank), in the last two years the number of financial  institutions that have invested more than 1.2M€ in the development of commercial Open Banking  services has grown (22% in 2019 vs. 27% in 2021). The trend confirms the growing willingness of banks to invest in Open Banking and services related to the world of digitalisation and sustainability.

“Open Banking represents a great opportunity for the financial industry to create collaborative  innovation for the benefit of corporate and retail customers, also thanks to the aggregative work of pre competitive ecosystems such as CBI. Banks that continue to invest in technological innovation, digital  skills and sustainability will be the leaders in the transformed international competitive arena. The  report shows that we are still in an early stage of growth and that there is ample room for development  for those banks that are able to look beyond compliance towards Open Finance,” said Liliana Fratini  Passi, Managing Director of CBI, who was awarded the title of “Woman in FinTech of the  Year” in November 2021.

Marco Folcia, PwC Italy Partner, EMEA Payments & Open Banking Centre of Excellence  Leader explains: “Italy is keep moving on its path towards Open Banking even if, to date, the adoption  rate is still low both at the level of market players (13 active TPPs) and end users (e.g. less than 5% use  Open Banking services). In this sense, the main elements that could stimulate its growth are the increase  of awareness towards end users on the potential of Open Banking and the associated benefits, the  improvement of interfaces dedicated to third parties made available by banks and the development of  collaborative initiatives, also with operators outside the financial world, to spread an Open culture  among market players”.

Download “The Global Open Banking Report” on www.cbi-org.eu.