CLOUD SOLUTIONS
FINASTRA SHOWS EVOLUTION OF OPEN BANKING AND GROWING APPETITE FOR OPEN FINANCE
Finastra research reveals that Open Banking is now universally and unequivocally regarded as a key part of a bank ’ s landscape , with 99 % of respondents considering it either a ‘ must have ’ or ‘ important ’ – up from 94 % in 2021 . The proportion of global financial institutions that consider it a ‘ must have ’ has risen to 61 %.
The Financial Services : State of the Nation Survey 2022 found that views on open finance are also maturing with some 94 % of financial institutions regarding it as either a ‘ must have ’ or ‘ important ’ in the context of data sharing . Almost half ( 48 %) of respondents now consider open finance a ‘ must have ’ – a notable rise from 2021 ( 38 %). The increase is significant across all territories but particularly pronounced in the UAE ( up from 50 % in 2021 to 71 % this year ), the UK ( up from 33 % to 47 %) and the US ( up from 45 % to 56 %). This suggests that the sector globally is actively investigating products and services that would benefit from an ecosystem model .
Over three-quarters of professionals agree that open finance is already making the industry more collaborative and is having a positive impact on the sector .
( 83 %) of institutions agree that BaaS and Embedded Finance are already expected / demanded by customers . More than a third ( 35 %) of institutions surveyed have improved or deployed BaaS in the past year , while 33 % have implemented Embedded Finance .
• Drivers for technological adoption remain consistent with previous years
• Growing the business ( 48 %), meeting current and future customer expectations ( 45 %), staying ahead of competitors ( 42 %) and cost-cutting ( 42 %) are all key drivers .
• Interestingly , half of the institutions ( 50 %) now have all or most of their software stack on cloud-based solutions , with a further third ( 32 %) splitting equally between cloud and on-premises solutions .
• Global financial institutions are being prudent with their technology investments – with 82 % noting constraints compared to 2021 . Despite the current economic uncertainty and wider cost pressures , the majority ( 74 %) forecast that they will have resumed their full investments by the end of H1 2023 .
• Support for ESG is widespread – Almost nine in 10 organisations ( 86 %) agree that it ’ s important for the financial services and banking sector to support Environmental , Social and Governance initiatives . Linked to this , 82 % of respondents agree that green lending presents an opportunity for growth and revenue generation , with the UAE ( 94 %) and Singapore ( 88 %) showing the strongest appetite . �
The research was conducted amongst 758 professionals at financial institutions and banks from August to September 2022 across France , Germany , Hong Kong , Singapore , the UAE , the UK and the US . It explores the Open Banking and finance landscape , the technology and initiatives set to make an impact in financial services over the next year and the growing importance of ESG .
Other insights include :
• Banking-as-a-Service ( BaaS ) and Embedded Finance have become an industry norm – The majority
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