API Banking Market Size, Share and Trend Analysis, By Component (Solution, Services), Deployment Model (On-Premises, Cloud-Based), By End-Use (Financial Institutions, Non-Banking Financial Institutions (NBFIs), Fintech, E-commerce, Healthcare, Retail and hypermarket, Others), and By Region, Forecast 2025-2032

API Banking Market Overview and Key Insights:

The global API banking market size reached USD 31.73 Billion in 2024 and is expected to register a revenue CAGR of 25.8% during the forecast period. Rapid integration of application programming interfaces (APIs) in digital payment, owing to the adoption of smartphones and internet access is a major factor driving the market revenue growth of API banking market. According to the International Telecommunication Union (ITU), around 5.5 billion people will be using the Internet in 2024.

Market Drivers:

Growth of Financial Technology (FinTech) ecosystem in providing seamless customer-centric solutions such as digital payments, lending, wealth management, and neo-banking is significantly contributing to market revenue growth of API banking market. According to the World Economic Forum (WEF), a survey of 227 FinTech companies worldwide revealed that 51% witnessed strong consumer demand for their services as the primary driver of growth.

Payment processing, lending, wealth management, and insurance fintech companies highly rely on application programming interfaces (APIs) to access customer financial data, initiate payments, and integrate with banking systems. APIs in banking enable secure real-time data exchange for processing transactions.

FinTech aggregators are working with several banks to provide instant banking facilities to customers. Digital payment systems and mobile banking platforms are bridging the gap for customers who live distant from traditional brick-and-mortar banks, providing crucial services such as money transfers, bill payments, and savings accounts.

Market Opportunity:

Expansion of API banking with mobile-first strategies owing to the rapid penetration of 5G technology is expected to propel the market revenue expansion over the forecast period. According to the GSM Association, global 5G connections are expected to surpass 2 billion by 2025. The 5G technology is helping banking, financial services, and insurance (BFSI) and FinTech industries to provide high-end user-centric digital engagement for customers, with high speed, low latency, and higher bandwidth. Moreover, 5G technology is helping BFSI and FinTech to offer more personalized solutions for customers by gathering real-time information securely.

Integration of artificial intelligence (AI) and blockchain are driving growth opportunities in API banking market. These technology-driven innovations are opening up new possibilities for key competitors or new players to develop innovative and secured APIs for Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs). These factors are projected to drive market revenue growth by 2032.

Recent Trends:

Rapid adoption of open banking is emerging as a major market trend in the API banking market. The European Union (EU) has successfully implemented open banking which are also known as the Payment Services Directive (PSD2). Countries such as the U.S., Japan, Singapore, Japan, and South Korea are introducing open banking APIs, which is a positive step toward creating a regulated market. Regulatory authorities in some of these countries finalized their open banking rule, which will encourage innovation competition in BFSI and FinTech industries.

For instance, in October 2024, the Consumer Financial Protection Bureau (CFPB) finalized a regulation on personal financial data rights. This new regulation will drive adoption of open banking in the United States by reducing lock-in of BFSI. Moreover, this will further enhance consumer access to financial services on competitive terms, and enable new functionalities through greater access to consumers’ financial data.

Additionally, incorporation of biometric authentication is an emerging trend in API Banking market. Security is real-time transactions is a major challenge and companies are developing highly encrypted products or solutions to secure every financial transaction.  

Restraints & Challenges:

Consumers globally are encountering several fraudulent activities during third parties (TPPs) transactions, and providing adequate security for every financial transaction could be a major challenge to the market. According to a report by the U.S. Federal Trade Commission (FTC), In 2023, individuals reported losing over USD 10 billion to fraud, marking an increase of more than USD 1 billion compared to 2022. Over USD 4 billion of these losses were attributed to investment-related scams. Bank transfers and payments accounted for the highest total losses reported in 2023, amounting to USD 1.86 billion, followed closely by cryptocurrency losses at USD 1.41 billion.

Component Segment Insights and Analysis:

Based on the component, the API banking market is segmented into services and solutions.

The solutions segment will be sub-segmented into the key areas of account management, payment process, open banking, credit scoring, fraud detection, and others.

The services segment will be sub-segmented into the areas of consulting, implementation and integration, support and maintenance, and managed services.

The solutions segment contributed the largest revenue share in 2024. Rising integration of direct-to-bank APIs contributed to revenue share expansion. Banking, financial services, and Insurance (BFSI), and FinTech companies are increasingly incorporating API to real-time access balances, transaction tracking and biometric payment processing. New product launches in corporate banking APIs have fueled market entry strategies of API Banking.

For instance, In June 2024, Trovata launched its new Multibank Connector, with the most comprehensive library of direct-to-bank APIs designed to power financial services globally. The solution aims to drive advancements in corporate banking, finance, accounting, and treasury services, particularly for mid-market and enterprise companies.

The services segment is expected to register fastest revenue growth over the forecast period. Implementation and integration services are witnessing rapid growth owing to rapid integration of APIs solutions to migrate from legacy banking systems to API-driven platforms. Moreover, BFSI and FinTech are hiring strategists and consultants to design API strategies that align with regulatory compliance, open banking standards, and customer-centric innovation.

Deployment Model Segment Insights and Analysis:

Based on the deployment model, the API Banking Market is segmented into on-premises and cloud-based.

The cloud-based segment will be sub-segmented into the key areas of public cloud, private cloud, and hybrid cloud.

On-Premises segment contributed largest revenue share in 2024. Increased utilization of APIs to provide secured gateways in banking and financial institutions is driving the market revenue expansion. On-premise-based API deployment allows BFSI to control software components in-house and within their own server to ensure the complete security of their infrastructure.  

Cloud-based segment is expected to register the fastest revenue CAGR over the forecasted period. Rising deployment of cloud-based APIs to streamline deployment process efficiently is expected to propel significant market revenue growth by 2032. Moreover, globally banks and financial institutions modernizing their legacy systems.

Deployment of cloud-based APIs banking and financial institutions can launch new products and quickly enter the market in corporate banking, large businesses, small and medium businesses (SMB), and retail customers. This build-and-migrate strategy will help BFSI companies to gradually expand their existing customer bases to the new banking platforms.

On January 2024, Geneva, Switzerland-based Temenos Headquarters SA, launched its end-to-end enterprise services on Temenos Banking Cloud, which allows banks to deploy solutions within 24 hours and drastically cut modernization costs.

End-Use Segment Insights and Analysis:

Based on the end-use, the API banking market is segmented into financial institutions, non-banking financial institutions (NBFIs), FinTech, e-commerce, healthcare, retail, hypermarket and others.

Financial institutions segment will be sub-segmented into the key areas of commercial banks, central bank, and investment banks.

Non-banking financial institutions (NBFIs) segment will be sub-segmented into the areas of insurance companies, microfinance, brokerage and wealth management, and others.

Financial institutions segment contributed the largest revenue share in 2024. Rapid incorporation of APIs in banking contributed to the revenue expansion in 2024. Banks are significantly deploying and integrating APIs in digital transactions and cash management. As a result, to address rising demand in financial institutions several key players are developing product-market fit (PMF) solutions, which are supporting marketing revenue share expansion in this segment.

For instance, In May 2024, VoPay International Inc, launched VoPay digital transaction and cash management banking platform, which is aimed at helping banks and credit unions implement API-first transaction banking and cash management services.

FinTech segment is expected to register fastest revenue growth by 2032. Globally, FinTech companies are increasingly leveraging API solutions to offer innovative solutions in payments, lending, and wealth management, which are tailored to meet the evolving demands across small and medium businesses (SMB) and retail businesses. Moreover, rising consumer demand for digital payments is further expected to penetrate the market revenue growth over the forecast period.

Geographical Outlook:

North America registered highest market share in the API Banking Market. Rising adoption of digital payments across this region is a major factor contributing to the market revenue growth in this region. According to a national survey of the American Bankers Association (ABA), consumers across the U.S. are adopting digital banking platforms. In 2023,48% of bank customers identified mobile apps on phones, while 23% preferred online banking through laptops or PCs.

Strategic collaboration between Banking, Financial Services, and Insurance (BFSI) and key players are expected to create several growth opportunities in this region. In November 2024, American Express partnered with MX Technologies for API-driven data access. This collaboration introduces new digital banking options for providing a better customer experience in financial data sharing security.

Investment in FinTech ecosystem is further projected to drive revenue growth in Canada. According to research, USD 7.8 billion was invested in the Canadian FinTech industry during the first half of 2024.

Europe contributed a substantial revenue share in 2024. Introduction of Revised Payment Services Directive (PSD2) to provide banks with API access to third-party providers (TPPs) supporting the market revenue growth in Europe. In July 2024, the European Union (EU) commission published a fresh proposal of Revised Payment Services Directive (PSD3) to update the existing payment services framework by strengthening consumer protection and improving access to open banking. Implementation of new regulations is expected to generate significant growth in API banking market in Europe.

Growth in open banking payment generates growth prospects in this region. According to the Open Banking Limited (OBL), In January 2024, the number of open banking payments recorded by OBL reached an all-time high of 14.5 million, reflecting a 69% year-on-year growth.

Asia Pacific is expected to register significant revenue growth by 2032. Asia Pacific is a major FinTech hub, major BFSI and FinTech companies in countries such as China, Singapore, and India are substantially deploying API integrations to deliver secured banking services.

Growth in BFSI and FinTech is propelling revenue growth and generating opportunities for new investments. According to the Ministry of Finance, India, In October 2024, the Unified Payments Interface (UPI) reached a significant milestone by processing 16.58 billion financial transactions in a single month, marking a 45% year-on-year growth in October 2023.

In September 2024, Standard Chartered partnered with National e-Governance Services Ltd (NeSL), India to introduce an API-driven electronic bank guarantee. This initiative enables the seamless integration of banking functions into corporate systems, driving the digitization of trade finance across India.

Moreover, emerging demand in open banking is driving in innovations in new solution development which are projected to generate significant demand in API banking market in this region. For instance, In November 2024, Singapore based Brankas launched its open banking compliance solution which is integrated with an API suite and eKYC technology.

Competition Analysis:

The API banking market is characterized by a fragmented structure, with several players competing across various segments and regions. The list of major players included in the API banking market report are:

• Plaid Inc.
• Stripe, Inc.
• TrueLayer Ltd. 
• Oracle Corporation
• Infosys Limited
• Finicity
• Yodlee, Inc.
• Mambu
• Yapily Ltd. 
• FidyPay
• MX Technologies Inc.
• Brankas 

• Trovata, Inc.
• Temenos Headquarters SA
• VoPay International Inc
• Wells Fargo & Company

Strategic Developments in API Banking Market:

• On 18^th September 2024, Wells Fargo & Company launched a set of specialized application programming interfaces (APIs) designed specifically for its commercial banking clients. This expansion of Wells Fargo’s API offerings grants immediate access to real-time data, aiming to enhance sales, improve liquidity, mitigate credit risk, and reduce expenses for floorplan and channel finance clients across various industries. The newly launched APIs provide clients with real-time, on-demand information, enabling them to efficiently manage inventory, optimize supply chain operations, and streamline payments.
• On 3^rd July 2024, United Arab Emirates (UAE), based Mashreq introduced an API-driven instant payments service for its corporate and institutional clients, integrated with the Central Bank of UAE’s Aani (Instant Payment Platform – IPP). This launch represents Mashreq’s pilot use case, enabling thousands of daily low-value payments for corporates in real-time through Aani. The bank has seamlessly integrated its corporate online banking services with the Aani/IPP platform and plans to gradually expand its Corporate API offerings as part of its broader transaction banking digital strategy.

Key Advantages for Stakeholders:

Navistrat Analytics’ industry report provides an in-depth quantitative analysis of various market segments, historical and current trends, market forecasts, and dynamics within the global market. The historical years covered in this report are 2022 to 2023, with 2024 serving as the base year for market size calculations. The forecast period extends from 2025 to 2032.

The report includes an executive summary and a comprehensive overview of market drivers, restraints, opportunities, and challenges (DROC), along with insights into regulatory standards. It features detailed analyses such as PORTER’s Five Forces, SWOT, and PESTLE, as well as assessments of technological trends and the competitive landscape.

PORTER’s Five Forces analysis helps stakeholders evaluate the impact of new entrants, competitive rivalry, supplier power, buyer power, and substitution threats, enabling them to assess the level of competition and the attractiveness of the global market. The competitive landscape provides stakeholders with a clear understanding of the current market positions of key players, offering valuable insights into their competitive environment.

Scope And Key Highlights of The API Banking Market Report:

The API banking market report offers a detailed analysis of market size, including historical revenue (in USD Billion) data for 2022-2023 and revenue forecasts for 2025-2032 across the following segments:

• Component Outlook (Revenue, USD Billion; 2022-2032)
  • Solutions
    • Account Management
    • Payment Process
    • Open Banking
    • Credit Scoring
    • Fraud Detection
    • Others
  • Services
    • Consulting
    • Implementation and Integration
    • Support and Maintenance
    • Managed Services

• Deployment Model Outlook (Revenue, USD Billion; 2022-2032)
  • On-premise
  • Cloud
    • Public Cloud
    • Private Cloud
    • Hybrid Cloud

• End-Use Outlook (Revenue, USD Billion; 2022-2032)
  • Financial Institutions
    • Commercial Banks
    • Central bank
    • Investment Banks
  • Non-Banking Financial Institutions (NBFIs)
    • Insurance Companies
    • Microfinance
    • Brokerage and Wealth Management
    • Others
  • Fintech
  • E-commerce
  • Healthcare
  • Retail and hypermarket
  • Others

• Regional Outlook (Revenue, USD Billion; 2022-2032)
  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • Germany
    • France
    • U.K.
    • Italy
    • Spain
    • Benelux
    • Nordic Countries
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • South Korea
    • Singapore
    • Oceania
    • ASEAN Countries
    • Rest of APAC
  • Latin America
    • Brazil
    • Rest of LATAM
  • Middle East & Africa
    • GCC Countries
    • South Africa
    • Israel
    • Turkey
    • Rest of MEA

Frequently Asked Questions (FAQ) About the API Banking Market Report