Issue link: https://go.axway.com/i/1321495
54 Open Banking APIs State of the Market Report 2020 It is not just that the bank's reliance on an outdated business model is unprofitable. Banks are usually also weighed down by an outdated culture that sees other potential ecosystem partners as competition. Bank management, especially in retail banking, may not be used to working collaboratively with external suppliers to provide services to customers and may perceive those with a strong customer experience focus as a threat, rather than a relationship that extends the end customer's overall engagement with the bank. Even where the bank culture encourages these partnerships, and where management teams are skilled in building collaborative ecosystem relationships, the infrastructure may hold them back. While many banks have commenced their digitization journey, they have not yet created the internal API-enabled infrastructure that would be necessary to expose functionalities securely with trusted partners. Meanwhile, financial services are moving into new markets. Open finance (also known as embedded finance: payments, insurance and lending available to end consumers at their point of engagement) is growing exponentially. The traditional banking market is estimated to be worth USD3.6 trillion today, when totaling the top 30 banks and insurance companies. Within ten years, the open finance market is estimated to be worth USD7.2 trillion, but the vast majority of banks are not yet leveraging APIs to engage with open finance opportunities. Open finance allows any business to manage and sell innovative financial services by seamlessly integrating creative forms of payment, debit, credit, insurance or even investment into their end user experiences. This is already occurring and those businesses that leverage APIs to help facilitate open finance - businesses like Stripe and Square, which have embraced open APIs and invested heavily in the developer experience - are valued at USD36 billion and USD57 Software Energy Utilities Pharmaceuticals Semiconductors Banks 2000 3000 1000 0 $ billion -1000 2018 Long term, 2020-market-valuation implied LONG-TERM INDUSTRY GROWTH PROJECTIONS 24