Open banking is now universally regarded as a key part of the banking landscape, according to a new survey conducted by financial software provider Finastra.
The Financial Services: State of the Nation Survey 2022 survey collected insights from 758 professionals at financial institutions and banks across France, Hong Kong, Singapore, the United Arab Emirates, the UK and the USA. According to the survey, 99 per cent of respondents considered open banking as either a ‘must have’ or as important in the context of data sharing, up from 94 per cent in the 2021 survey.
In addition, 94 per cent of financial institutions said that open finance is important, an increase from 91 per cent last year, suggesting that the sector is interested in adopting products and services that benefit from an ecosystem model. In fact, 85 per cent of respondents agreed that open finance is already helping to make the industry more collaborative.
“Over the years that we have conducted this survey, we have seen open finance grow from an emerging idea to a clear priority for institutions across the world, enabling, as it does, business model shifts such as embedded banking, as well as financial inclusion and equality,” said Simon Paris, CEO of Finastra.
Other insights from the survey highlight that banking as a service (BaaS) and embedded finance have become industry norms due to customer expectations, with more than one-third of the institutions stating that they have either improved or deployed BaaS in the past year.
Drivers for technology adoption have remained consistent with previous years, with business growth (48 per cent), meeting current and future customer demand (45 per cent), cost cutting (42 per cent) and staying ahead of competitors (42 per cent) being cited as the key priorities. However, the current economic uncertainty is making survey respondents more careful with technology investments, with 82 per cent noting constraints compared to 2021.
Lastly, 86 per cent of organisations cited support for environmental, social and governance initiatives, with 82 per cent saying that green lending offers an opportunity for revenue generation and business growth.