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The State of Open Finance | FinTech Roundup 2022

Open finance has reshaped the relationship between financial institutions and their clients. That being said, this disruptor witnessed many trends in 2022 – more entrants, more customers, and definitely more buzz about its potential. Collaborations that turned open finance data into useful, easy-to-use, and valuable services for customers and businesses shaped the open finance economy of 2022.


Don't forget to check out the full version of the report, brought to your in collaboaration with Open Future World, with many more use cases and segment trends 🔍


Before we proceed, if you're new or missed out on our previous open finance analysis, here they are for easy access:

 

Across financial institutions and FinTechs, some trends were very evident and built the narrative for the progress made during the year –


Focus on enhancing payments: FinTechs and incumbent financial institutions actively pushed open finance solutions to make the payments space more personalised and data-driven. For example, corporates embraced open banking-powered payments – bringing automation to reconciliation and accounting processes. Further, Variable Recurring Payments (VRPs) in the UK enabled new use cases, expanding the reach of automated payments to new facets of the business<>customer relationship.


The evolution towards Open Finance: 2022 saw the extension of open banking to broader data syncing both within and between financial institutions. With the progression of open banking to open finance, consent-based data sharing for various use cases became stronger. Innovations in digital lending processes, account aggregation, and verification solutions dominated the space.


Open Data evolved beyond finance in Australia: The Consumer Data Right (CDR) system in Australia has laid the groundwork for an open data economy to take hold. Companies came together to leverage enhanced data flows to offer businesses and customers highly relevant, personalised products. The regulators also stepped up their game by awarding more licences and setting up various guiding programs.


Collaborations: Partnerships extended beyond payments to enhance users' and merchants' financial experiences. Bank accounts, accounting, taxation, and reconciliation activities were integrated with payments and other financial services.


Regulatory Trends: Regulators across the globe developed data-sharing infrastructure and enhanced existing guidelines to facilitate standardisation in respective ecosystems to embrace open banking and open finance. The Middle East and Australia were the most active regions.


2022 marked a transitional year in the open economy movement. Governments and regulators ensured the money, data, and rights of end-users stayed safe. Open banking, and its extension, open finance, posed as powerful disruptive forces in the financial sector. It has become evident over the years that data transparency is the best course of action. The progress being made in open banking and open finance will drive the transformation that is to come at an industry-wide level.

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