The global financial services market, representing more than a quarter of the global economy, is on track to hit $22.51 trillion in 2021 amid an “open banking revolution” that is poised to trigger a six-fold growth to a $43.15 billion business from $7.3 billion in 2018, delegates at a banking event have learnt.
Banking and financial services are soon going to be faceless, touchless and seamless experiences for the customers, where transactions and processes are going to be a fully automated, nearly effortless and painless experience, panellists at the second Open Banking Forum said.
From simple payment transactions, the financial services industry is moving towards invisible pay that is easy, fast and invisible, as the industry re-discovers itself from a money-driven to a data-driven operation, industry experts observed.
The forum, organised by Cogent Solutions Event Management (CS Events), examined the overall digital disruption in the banking sector in the Mena region as experts painted the picture of how the future of banking experience is going to be like.
“The future of banking is going to be completely different from what it is now and it is going to be seamless, almost effortless, touchless and a very pleasant experience, compared to the current banking system where customers stand in queue for the services, resulting in a waste of valuable time,” said Nizam Deen, founder and chief executive officer of CS Events.
“The Covid-19 pandemic has accelerated the pace of digitisation in the banking sector – that now needs to create interfaces so that the customers can access banking services without physically visiting the bank branches or meeting banking professionals,” said Deen.
Speakers said the future of banking would be fully digital and driven by data where instead of man-to-man, transactions will be processed through a machine-to-machine system. Banking will be more transparent and will save the valuable time of the customers.
Experts predicted sweeping changes in the global financial services market that is expected to grow at 9.9 per cent from $20.49 trillion in 2020 to $22.51 trillion in 2021 and $28.52 trillion in 2025.
A report by Allied Market Research said that the global open banking market is projected to reach $43.15 billion by 2026, up from $7.3 billion in 2018, growing six-fold in eight years, as financial regulators, experts and officials debate the future of the banking industry.
According to Research and Markets, a global research advisory, the banking sector represents more than a quarter of the size of the global economy.
The number of open banking users worldwide is expected to grow at an average annual rate of nearly 50 per cent between 2020 and 2024, with the European market being the largest.
Europe accounted for approximately 12.2 million open banking users in 2020. This figure is expected to reach 63.8 million by 2024. As of 2020, 24.7 million individuals worldwide used open banking services, a number that is forecast to reach 132.2 million by 2024.
According to World Payments Report 2021 by Capgemini, global non-cash transactions volume is set to grow at the pre-pandemic level worldwide this year, sparked by the spending boom and rapid adoption of digital payments, crossing the $1 trillion volume landmark by 2022. Global non-cash transactions are poised to grow at a compound annual growth rate of 18.6 percent between 2020-2025 and reach $1.8 trillion by 2025.
The report noted that pandemic after-effects fuelled industry transformation to a new era as payments become embedded, immersive and out of sight. Embedded pay includes payments within products/offerings to enable a convenient, personalised customer experience.