Banking is evolving into an ecosystem driven by open data, innovation and greater consumer empowerment. Open finance promises to reshape how we manage money and access financial services.
Concepts, Definitions and Scope
Open banking refers to a system in which consumers can securely share their banking, transaction and financial data with third-party providers through standardized APIs. Historically, banks held data in silos, limiting consumer control and hampering innovation. By enabling consumer-permissioned data flows in real time, open banking unlocks new products and services.
Key data types include current accounts, savings, cards, payment initiation and transaction histories in both retail and investment banking.
- Increase financial transparency and consumer control
- Promote competition and innovation among banks and fintechs
- Power services such as budgeting apps, BNPL and account-to-account payments
Open finance extends this model to a broader set of financial products, from loans and mortgages to investments, pensions and insurance. Under this framework, developers access a consumer’s full financial footprint including loans, mortgages on one unified platform.
The UK’s FCA and ICO label this expansion as “smart data,” providing the legal and technical scaffolding for data portability across sectors. Smart data regimes aim to standardize formats, consent mechanisms and governance to enable open finance at scale.
Market Size, Adoption and Growth
The global open banking user base surpassed 470 million in 2025 and could reach approximately 645 million by 2029, driven by a 427% increase in API calls that year. Annual transactions exceeded 120 billion in 2025, reflecting rapid uptake.
Market valuation trends are equally striking: estimated at $38.86 billion in 2025, growing at a 24.8% CAGR to over $75 billion by 2028 and $94.14 billion by 2029. In North America, CAGR projections stand at 21.4% through 2027, while the US market alone may grow at 27.9% from 2025 to 2030.
Open finance-specific adoption shows over 132 million users globally in 2025 across some 32 leading countries. Brazil’s ecosystem processed 96 billion monthly API calls, highlighting Latin America’s pioneering role.
- UK: 15.16 million active users in July 2025, half of adults projected by mid-2025
- Europe: 551 third-party providers operating in Q1 2025
- APAC: 44% YoY account growth, India and Singapore recorded over 80% API call growth
Regulatory and Policy Landscape
Regulators view open banking as a data-sharing right and competition tool that advances inclusion and innovation. Many jurisdictions began by mandating data portability for retail accounts and payments, gradually extending toward open finance under smart data frameworks.
In the UK, the Financial Services Growth and Competitiveness Strategy (July 2025) outlines next steps for open finance. The FCA’s Smart Data Accelerator will pilot use cases, refine consent mechanisms and inform policy. A new industry-led Delivery Company and Bank of England’s Retail Payments Infrastructure Board aim to modernize account-to-account rails to support future open finance services.
Across the EU, PSD2 laid the foundation for third-party access to payment account data. Member states are exploring extensions to address insurance, pensions and investments, harmonizing standards and strengthening consumer protections.
Technology Enablers
Open finance relies on robust APIs, data standards and secure identity frameworks. Emerging technologies that power this evolution include:
- OAuth and other consent-driven authentication protocols
- Standardized data schemas managed by industry consortia
- Encrypted data transmission and tokenization
- AI-driven analytics for personalized insights
These enablers create the infrastructure for seamless, cross-platform service delivery while safeguarding user privacy and minimizing operational risk.
Use Cases and Business Models
Open finance unlocks a wealth of applications and monetization strategies. Key use cases include:
- Aggregated personal finance dashboards that combine bank, investment and loan data
- AI-driven credit scoring using multi-asset data points
- Embedded finance offerings in retail, travel and healthcare sectors
- Variable Recurring Payments (VRPs) for subscription-based services
New business models include data-as-a-service subscriptions, revenue-sharing partnerships between banks and fintechs, and integration fees for platform-based ecosystems.
Risks, Inclusion and Competition Impacts
Despite its promise, open finance introduces risks around data privacy, security and consent fatigue. Robust governance, transparent consent flows and ongoing oversight are essential to maintain trust.
However, by lowering barriers to entry, open finance fosters competition and drives down costs, benefiting underserved populations. The World Bank’s Global Findex 2025 shows that 42% of adults worldwide made a digital payment in 2024, up from 35% in 2021, indicating growing digital inclusion foundations.
With inclusive design, open finance can reduce gender gaps in financial access and support greater participation among low-income and rural communities.
Plausible Future Scenarios
Looking ahead, banking could evolve along several trajectories:
1. Unified Global Open Finance: Harmonized global standards enable cross-border data portability, creating integrated financial services that adapt to consumer needs anywhere.
2. Fragmented Regional Ecosystems: Divergent regulations lead to regional hubs with proprietary standards, requiring consortiums to bridge data gaps.
3. Embedded Finance Revolution: Non-financial industries embed tailored finance products, leveraging open finance to blur industry boundaries and drive new revenue streams.
4. Privacy-First Banking: Stronger data rights and user-controlled data vaults place consumers at the center, enabling selective sharing and advanced governance models.
Each scenario carries implications for competition, consumer choice and systemic resilience. Policymakers, institutions and innovators must collaborate to steer toward outcomes that enhance inclusion, innovation and stability.
In conclusion, open finance represents a transformative chapter in banking history. By embracing data portability, robust standards and consumer-centric design, the industry can unlock new levels of financial wellness and decision-making for billions worldwide.
