Finastra research reports boon in banking as a service industry for 2022

By Joy Dumasia

Finastra research reveals that Banking as a Service (BaaS) and embedded banking services are set to have a notable impact on the industry. Whilst all markets broadly anticipate this trend – 85% of respondents at global financial institutions – Hong Kong (92%), the UAE (90%) and Singapore (87%) expect the impact to be most significant.

85% of respondents at global financial institutions believe Banking as a Service (BaaS) will impact the following year; 40% believe the impact will be significant.

9 in 10 respondents agree that Open Banking is essential to their organization; 97% of those that already use Open Banking recognize that it has provided benefits to their business.

The survey also finds that most organizations are now deriving the benefits of Open Banking and Open Finance, with the latter considered the natural evolution for the sector. Globally, 94% of those surveyed agree that Open Banking is vital to their organization, with 63% reporting that it has enabled them to improve customer experience and 59% stating that it helped attract new customers.

The research was conducted amongst 785 professionals at financial institutions and banks in March 2021 across the US, UK, Singapore, France, Germany, Hong Kong and the UAE. It explores the Open Banking and Finance landscape, the technology and initiatives set to impact financial services over the next year, and how COVID-19 has impacted the sector.

Eli Rosner, Chief Product and Technology Officer at Finastra, said: “Our findings show how financial institutions are already benefiting from Open Banking and, new this year, a growing role for BaaS. We believe that these initiatives have already started paving the way to true Open Finance, helping financial services institutions to develop and enhance the services they provide to their customers. Valuable insight from so many financial institutions sets the tone for the evolution of financial services as banks and their customers adapt beyond the pandemic and, together with the industry support they provide, serve their communities better.”

Recently, IBS Intelligence reported that German full-service payment provider Novalnet AG and European open banking platform Tink have partnered to bring a new open banking payment solution to the European payments market.