Global Adoption of Open Banking Legislation
Open banking legislation has now been implemented in approximately 60 jurisdictions worldwide. However, despite this widespread adoption, many banks continue to view open banking primarily as a cost centre. A recent study reveals that numerous financial institutions lack a viable commercial model, a clear path to generating revenue, and adequate incentives to exceed basic regulatory requirements.
Encouraging a Shift Towards Commercial Viability
To address this industry stagnation, Ozone API, founded by the original authors of the UK open banking standard, has released Commercialising Open Banking: A Practical Guide. This complimentary resource aims to provide banks with a structured, actionable framework for creating sustainable commercial models around their Application Programming Interfaces (APIs).
Transitioning from Compliance to Commercialization
Huw Davies, co-founder and CEO of Ozone API, emphasized the significant opportunities many banks are overlooking. He pointed out that while open banking is now operational in around 60 jurisdictions—a milestone worth celebrating—most banks still treat it merely as a compliance project.
“Without a commercial model, there’s no revenue and hence no incentive to advance,” he noted. The guide was developed after consultations with banks, central banks, and regulators across six continents, allowing the authors to identify effective strategies.
Davies further explained, “Shifting from a compliance mindset to commercialization is not overly complex. However, it does require banks to intentionally develop a commercial model rather than tacking it on as an afterthought.”
A Structured Approach to API Commercialization
The guide proposes a three-tiered framework inspired by successful digital implementations observed globally:
- Foundational APIs: These are essential for compliance but also play a critical role in customer retention, enhancing market positioning, and fostering broader ecosystem participation.
- Premium APIs: Offering value-added services such as advanced payment solutions, identity verification, and enriched data analytics, these APIs are designed to entice third parties to pay for access.
- Distribution Channel APIs: These APIs allow banks to seamlessly integrate their products into various customer touchpoints, effectively transforming open banking into a genuine growth avenue.
Insights for Navigating a Fragmented Global Market
The guide provides insights tailored for major global markets, including the UK as it prepares for an open finance expansion, and the EU, which awaits final texts for the upcoming PSD3 regulations expected in the first half of 2026.
Additionally, it delves into the US market, where the emphasis is shifting toward commercialization amidst delays in regulatory advancements under Section 1033. Brazil stands out with its 35 million active users and an impressive 2.3 billion successful API communications processed weekly.
Beyond API strategy, the guide addresses the practical challenges of digital transformation. It discusses platform requirements, the long-standing ‘build vs. buy’ dilemma, typical implementation obstacles, and realistic timelines for project completion. Furthermore, it offers strategies for securing internal buy-in across technology, product, legal, and executive teams, ensuring that commercial initiatives do not falter.