Financial Data APIs Market: Current Analysis and Forecast (2024-2032)
Emphasis on Type (Cloud-Based APIs, Web-Based APIs); Application (Banking, Insurance, Wealth Management, and Others); End User (BFSI, IT and Telecommunications, Retail, Healthcare, Others); and Region/Country
Financial Data APIs Market Size & Forecast
The Financial Data APIs Market was valued at approximately USD 2.8 Billion in 2023 and is expected to grow at a substantial CAGR of around 19.2% during the forecast period (2024-2032) owing to the rise in open banking regulations and growth of fintech ecosystems.
Financial Data APIs Market Analysis
A Financial Data API is a vertically defined application system that grants filtered, converted, and interoperable access, as well as sharing and integration of financial data. They act as intermediaries between the banks and financial institutions and the FinTech’s and third parties for services such as account consolidation, real-time payments, and customized finance. These APIs are basic to open banking as they offer secure and standardized interactions while improving the user interfaces and application functionality.
To expand the market of Financial Data APIs, businesses are investing in cloud-based API and integration frameworks, AI, and real-time analytics to advance their services presented in the Financial Data APIs market. Moreover, rising partnerships with FinTech firms, claiming open banking compliance and investing in API safety to gain consumer confidence. Also, firms are charging money for APIs through a subscription revenue-generating model and venturing into Embedded Finance to reach out more to the markets.
For instance, on December 18, 2023 - The Financial Data Exchange (FDX) announced its Fall release of FDX API 6.0. Among other things, this version of the API includes extended fraud notification, more options for payment network data, updates to tax documentation, corporate/treasury support, and the first payroll data structures. An updated and more concise version of the security Control Considerations document is a major addition to the API, as well as the incorporation of the FAPI security schema.
Financial Data APIs Market Trends
This section discusses the key market trends influencing the various segments of the Financial Data APIs market as identified by our research experts.
Cloud-Based APIs Transforms Financial Data APIs Industry
Cloud-based APIs held a significant share of the market in 2023. This is mainly due to providing scale-ability and flexibility, and their costs are inexpensive thus helping companies to expand their service delivery without necessarily laying down hefty infrastructure investments. While more financial institutions are adopting cloud solutions, API plays a unique role in working with other services to enhance customer experiences. Solutions delivered from the cloud also mean that the solutions are deployed and updated more quickly, which encourages innovation. Moreover, companies incorporate cloud APIs because they help to increase company productivity and produce versatile and efficient applications for numerous clients. For instance, on December 13, 2023, Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment insights, announced the launch of Direct Web Services, a collection of application programming interfaces (APIs) that packages Morningstar's data, research, and calculation engines for financial services firms to use in their own digital solutions. Direct Web Services is complemented by a newly created global network of certified partners to seamlessly integrate API functionality for firms developing sophisticated websites and applications.
North America leads the market.
North America leads the growth of the Financial Data APIs market due to its well-developed FinTech industry, increasingly popular digital banking, and biasing PSD2 (The Revised Payment Services Directive (PSD2)) and open banking norms. Adding to this, companies in the region use APIs to share current financial information, improve customer satisfaction, and implement innovations from third parties. Also, real-time data analytics and APIs, CCP (Central Counterparty), and embedded finance approaches help financial institutions build scale and optimize costs. Moreover, the rise in demand for unique financial solutions and safe payment methods also drives the use of APIs.
For instance, in December 2023, TD Bank Group (TD) and Plaid announced that they have entered into a North American data-access agreement that will enable TD customers in Canada and the U.S. to more securely connect to and share financial data with Plaid's data network of over 8,000 + apps and services.
Financial Data APIs Industry Overview
The Financial Data APIs market is competitive, with several global and international players. The key players are adopting different growth strategies to enhance their market presence, such as partnerships, agreements, collaborations, new product launches, geographical expansions, and mergers and acquisitions. Some of the major players operating in the market are Yodlee, Inc. (Envestnet); Tink AB; Plaid Inc.; FactSet; Barchart.com, Inc.; Quodd, Inc.; Alpha Vantage Inc.; Morningstar, Inc.; Mastercard International Incorporated (Finicity); Bloomberg Finance L.P.
Financial Data APIs Market News
- In June 2023, Akoya announced its partnership with Axway to help financial institutions tap into the power of open APIs and transform the way customer information is shared with third-party applications. Both companies have standardized their APIs to the Financial Data Exchange (FDX) standard, which allows for customer data sharing in a secure and transparent way.
- In July 2021, Finicity, a Mastercard company and leading provider of open banking solutions, announced that it has signed a data access agreement with Green Dot (NYSE: GDOT), a digital bank and fintech focused on delivering trusted, best-in-class banking and payment solutions that seamlessly connect people to their money.
- In June 2020, Mastercard (NYSE: MA) announced it had entered into an agreement to acquire Finicity, a leading North American provider of real-time access to financial data and insights. The purchase price is USD 825 million, and Finicity’s existing shareholders have the potential for an earn-out of up to an additional USD 160 million, if performance targets are met.
Financial Data APIs Market Report Coverage
Reasons to buy this report:
- The study includes market sizing and forecasting analysis validated by authenticated key industry experts.
- The report presents a quick review of overall industry performance at one glance.
- The report covers an in-depth analysis of prominent industry peers with a primary focus on key business financials, product portfolios, expansion strategies, and recent developments.
- Detailed examination of drivers, restraints, key trends, and opportunities prevailing in the industry.
- The study comprehensively covers the market across different segments.
- Deep dive regional level analysis of the industry.
Customization Options:
The global Financial Data APIs market can be customized further as per the requirement or any other market segment. Besides this, UMI understands that you may have your own business needs, hence feel free to connect with us to get a report that completely suits your requirements.
Table of Contents
Research Methodology for the Financial Data APIs Market Analysis (2022-2032)
Analyzing the historical market, estimating the current market, and forecasting the future market of the global Financial Data APIs market were the three major steps undertaken to create and analyze the adoption of Financial Data APIs in major regions globally. Exhaustive secondary research was conducted to collect the historical market numbers and estimate the current market size. Secondly, to validate these insights, numerous findings and assumptions were taken into consideration. Moreover, exhaustive primary interviews were also conducted, with industry experts across the value chain of the global Financial Data APIs market. Post assumption and validation of market numbers through primary interviews, we employed a top-down/bottom-up approach to forecasting the complete market size. Thereafter, market breakdown and data triangulation methods were adopted to estimate and analyze the market size of segments and sub-segments of the industry. Detailed methodology is explained below:
Analysis of Historical Market Size
Step 1: In-Depth Study of Secondary Sources:
A detailed secondary study was conducted to obtain the historical market size of the Financial Data APIs market through company internal sources such as annual reports & financial statements, performance presentations, press releases, etc., and external sources including journals, news & articles, government publications, competitor publications, sector reports, third-party database, and other credible publications.
Step 2: Market Segmentation:
After obtaining the historical market size of the Financial Data APIs market, we conducted a detailed secondary analysis to gather historical market insights and share for different segments & sub-segments for major regions. Major segments are included in the report as type, application, end user, and regions. Further country-level analyses were conducted to evaluate the overall adoption of testing models in that region.
Step 3: Factor Analysis:
After acquiring the historical market size of different segments and sub-segments, we conducted a detailed factor analysis to estimate the current market size of the Financial Data APIs market. Further, we conducted factor analysis using dependent and independent variables such as Type, Application, end user, and regions of the Financial Data APIs market. A thorough analysis was conducted for demand and supply-side scenarios considering top partnerships, mergers and acquisitions, business expansion, and product launches in the Financial Data APIs market sector across the globe.
Current Market Size Estimate & Forecast
Current Market Sizing: Based on actionable insights from the above 3 steps, we arrived at the current market size, key players in the global Financial Data APIs market, and market shares of the segments. All the required percentage shares split and market breakdowns were determined using the above-mentioned secondary approach and were verified through primary interviews.
Estimation & Forecasting: For market estimation and forecast, weights were assigned to different factors including drivers & trends, restraints, and opportunities available for the stakeholders. After analyzing these factors, relevant forecasting techniques i.e., the top-down/bottom-up approach were applied to arrive at the market forecast for 2032 for different segments and sub-segments across the major markets globally. The research methodology adopted to estimate the market size encompasses:
- The industry’s market size, in terms of revenue (USD) and the adoption rate of the Financial Data APIs market across the major markets domestically
- All percentage shares, splits, and breakdowns of market segments and sub-segments
- Key players in the global Financial Data APIs market in terms of products offered. Also, the growth strategies adopted by these players to compete in the fast-growing market
Market Size and Share Validation
Primary Research: In-depth interviews were conducted with the Key Opinion Leaders (KOLs) including Top Level Executives (CXO/VPs, Sales Head, Marketing Head, Operational Head, Regional Head, Country Head, etc.) across major regions. Primary research findings were then summarized, and statistical analysis was performed to prove the stated hypothesis. Inputs from primary research were consolidated with secondary findings, hence turning information into actionable insights.
Split of Primary Participants in Different Regions
Market Engineering
The data triangulation technique was employed to complete the overall market estimation and to arrive at precise statistical numbers for each segment and sub-segment of the global Financial Data APIs market. Data was split into several segments and sub-segments after studying various parameters and trends in the type, application, end user, and regions of the global Financial Data APIs market.
The main objective of the Global Financial Data APIs Market Study
The current & future market trends of the global Financial Data APIs market were pinpointed in the study. Investors can gain strategic insights to base their discretion for investments on the qualitative and quantitative analysis performed in the study. Current and future market trends determined the overall attractiveness of the market at a regional level, providing a platform for the industrial participant to exploit the untapped market to benefit from a first-mover advantage. Other quantitative goals of the studies include:
- Analyze the current and forecast market size of the Financial Data APIs market in terms of value (USD). Also, analyze the current and forecast market size of different segments and sub-segments.
- Segments in the study include areas of type, application, end user, and regions.
- Define and analyze the regulatory framework for the Financial Data APIs
- Analyze the value chain involved with the presence of various intermediaries, along with analyzing customer and competitor behaviors of the industry.
- Analyze the current and forecast market size of the Financial Data APIs market for the major region.
- Major countries of regions studied in the report include Asia Pacific, Europe, North America, and the Rest of the World
- Company profiles of the Financial Data APIs market and the growth strategies adopted by the market players to sustain the fast-growing market.
- Deep dive regional level analysis of the industry
Frequently Asked Questions FAQs
Q1: What is the Financial Data APIs market's current size and growth potential?
The Financial Data APIs market was valued at USD 2.8 Billion in 2023 and is expected to grow at a CAGR of 19.2% during the forecast period (2024-2032).
Q2: What are the driving factors for the growth of the Financial Data APIs market?
The rise in open banking regulations, increasing demand for real-time financial data, growth of fintech ecosystems, expanding usage of AI and machine learning, and rising consumer demand for personalization drive the Financial Data APIs market.
Q3: Which segment has the largest share of the Financial Data APIs market by type?
Cloud-Based APIs has the largest share of the Financial Data APIs market by type.
Q4: What are the major trends in the Financial Data APIs market?
The rise in use of API Monetization Models and the adoption of Banking-as-a-Service (BaaS) is the major trend in the Financial Data APIs market.
Q5: Which region will dominate the Financial Data APIs market?
North America dominated the market in 2023.
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