Helping your users co-create the value they need

Last updated: 23 January 2021

What it’s about: Our Open Banking APIs Quarterly Trends series tracks the growth of the open banking ecosystem. This post focuses on how banks are reorienting towards platform business models by opening API products, and reviews the emerging business models from leadership banks.

Why it’s important: Key industries around the world are moving towards becoming digital ecosystems. How banks shift towards an open banking ecosystem will impact on all of us.

Globally, between Q4 2019 and Q4 2020, there was a 378% annual growth rate in open banking platforms.  2020 saw a fundamental shift in open banking, with the majority of regions now fully establishing their open banking infrastructure.

ABOVE: Global open banking adoption by banks and products, Q4 2020

By the end of 2020, we were tracking 559 open banking platforms (up from 117 at the end of 2019).

Open Banking Platform Growth by Region, Q4 2018 - Q4 2020

METHODOLOGY: Platformable tracks all banks globally and tallies those that have established an open API platform. We then review how many API products are made available by each bank and tally them according to category, and measure other API characteristics such as standards and specifications used, developer experience strategies employed, and business model/monetisation approaches. We review each bank at least once every three months.

Around the world, each region is seeing growth:

Europe and Scandinavia

  • 577% annual growth in API platforms (from 117 to 559) and 183% increase in API products (from 476 to 1,346).
  • The majority of products being offered are still PSD2-related: Accounts and Payment APIs remain the largest API product component (accounting for 80% of all products in the region)
  • Some leadership banks are moving into other products: such as KYC/Identity APIs, which grew 9% in Q4 quarter-on-quarter to account for 14% of total API products.

Asia Pacific

  • 208%annual growth in platforms (from 25 to77) and 687% surge in products (from 187 to 1,471).
  • Unlike Europe, banks in Asia Pacific have the microservices architecture models and infrastructure to offer more granular functionalities via API. As a result, banks in the region have a greater total number of APIs available on a smaller number of open banking platforms than their European peers.

Middle East & Africa

  • 617% annual growth in platforms (from 6 to 43) and a 397% increase in products (from 73 to 363).
  • Turkey was the key driver behind open banking expansion in 2020, as the country’s recent introduction of open banking legal infrastructure - the Regulation on Banks’ Information Systems and Electronic Banking Services -  entered into force on July 1, 2020.

Latin America

  • 375% annual growth in platforms (from 4 to 19) and 271% increase in products (from 21 to 78).
  • The Central Bank of Brazil's introduction of an Open Banking Regulation in May 2020, which was initially planned to start in November 2020, has accelerated the deployment of API products in the country.
  • As Brazil’s lawmakers aim towards an Open Finance framework by the end of 2021, banks are offering more functionalities via APIs: Account, Payment, KYC/Identity and Bank products/ATM locations APIs jointly accounted for 69% of total API products developed in the country in Q4.

North America

  • 250% annual growth in platforms (from 6 to 21) and 138% increase in products (from 47 to 112),
  • Most of the growth in 2020 came from the US but Canada may soon catch up: they are  looking to implement a regulatory framework in 2021.
  • The US also skews to having more API products available from commercial banks which are moving towards banking-as-a-service models for their corporate customers. A strong influence in both the US and Canada is the nonprofit industry standards body, Financial Data Exchange, which works with fintech and banks to encourage use of an industry-agreed open banking API standard. This has helped facilitate partnerships and led to the creation of new digital financial services products that customers can link directly to their bank accounts.
Bank API products by category, Q4 2020 (N=3496)

METHODOLOGY: Platformable tracks all banks globally and tallies those that have established an open API platform. We then review how many API products are made available by each bank and tally them according to category, and measure other API characteristics such as standards and specifications used, developer experience strategies employed, and business model/monetisation approaches. We review each bank at least once every three months.

The true indication of the maturity of an open banking ecosystem will occur when banks go beyond the regulatory requirements and begin producing and offering multiple open banking API products that expose data and financial services across a broad range of categories. This will enable fintech partners and customers to build their own services and co-create the value they want.

To date, the vast majority of open banking API products are centred on payments, accounts and bank product information, which are mandated API requirements in Europe, UK, and Australia. "Other" API products include those that have multiple functionality, make utilities and other functionalities available (for example, to send notifications to users), or are for sandbox-only use.

Bank API products by category and region, Q4 2020 (N=3496)

METHODOLOGY: Platformable tracks all banks globally and tallies those that have established an open API platform. We then review how many API products are made available by each bank and tally them according to category, and measure other API characteristics such as standards and specifications used, developer experience strategies employed, and business model/monetisation approaches. We review each bank at least once every three months.

In Europe & Scandinavia, and in the UK, 75% of available API products in each region match regulatory requirements (that is, payments, account information, and in the UK, bank products). Other regions of the world are more innovative, with a more diverse suite of offerings being made offered to external partners.

Open Banking Product Growth by Region, Q4 2018 - Q4 2020

METHODOLOGY: Platformable tracks all banks globally and tallies those that have established an open API platform. We then review how many API products are made available by each bank and tally them according to category, and measure other API characteristics such as standards and specifications used, developer experience strategies employed, and business model/monetisation approaches. We review each bank at least once every three months.

Open Banking API Business Models

Around the globe, many banks are opening APIs because they are required to do so by regulations. But a leadership group is emerging that is going beyond compliance requirements and beginning to leverage open APIs as a new revenue stream. These banks are reorienting towards a platform model that exposes bank functionalities to ecosystem partners. A range of promising practices that can help banks reorient towards a platform mindset are becoming evident.

While the majority of open banking platforms do not publicly announce their pricing strategies, it is clear that leaders are establishing their digital rails in a way that will make this possible in future.

Promising Practices

Swedish Banks

Has divided API program into two streams: PSD2 APIs and Premium APIs.
Also, PSD2 APIs are enhanced offerings with full value chain components for both retail and business customers.
“Premium APIs” suggests that these will be paid bundles of high value APIs that can create new shared revenue models in partnership with the selected external providers.
Swedbank, for instance, has reported that: More than 50 TPPs from 14 European countries (15% of all European TPPs) are connected to Swedbank’s PSD2 APIs. Over 5.4 million payments executed (over €360 million value) as of September 2020.

National Bank of Greece

Full suite developer portal including:
  • Online developer studio to code in Python, PHP, Node,js and HTML
  • Extensive catalogue of APIs including instant loan platform, customer insights, ecommerce APIs, ERP connections, and rewards APIs
  • Support Forums (where bank leads respond to developer queries in a timely manner)
  • Challenges with substantial prizes
  • Slack channel with 204 developers participating
Recently added "Social Network Platform" API, which helps API users and their end customers develop and support a fully functional social network.
At present, there are no pricing fees indicated for individual APIs, but each specific API product lists potential developer segments and businesses (such as crowdfunding platforms, software providers, merchants and ticket providers). This will be important in future if moving towards monetization. In addition, some APIs are only available to registered partners, suggesting a business model is in place.

Standard Chartered

The bank has a partnership business model, with a full-suite developer portal (aXess), and has recently launched a BaaS platform - Nexus. The bank has been particularly active in building partnerships in Asia Pacific, and intends to further roll out the service to other markets in Africa and the Middle East.
In Q4 2020, the bank added a new API product - Corporate Financial Markets (SCALE API) to several markets in Asia Pacific and Africa. The API is to help businesses to expand internationally without having to worry about managing FX risks.
BaaS APIs allow external partners to create their own financial services built off the bank’s core functionalities. The bank’s BaaS business model suggests individual partnership payment agreements with each API.

Please also check out our Tools and Models to Measure Open Banking Value for data points on what types of value API-based ecosystems and partnership-driven business models are already generating for banks.

Keep up to date with our open banking quarterly trends reports. Subscribe now for access to a downloadable data deck and for early adopter access to our interactive dashboard and API.