Nearly half of European financial executives – 47 per cent – say their Open Banking budgets have risen this year, according to research by Tink.

The Open Banking platform’s study is based on 308 senior decision makers at financial institutions across 12 European countries.

Figures show that the Covid-19 pandemic has impacted budgets for 93 per cent of respondent’s institutions, with almost a quarter – 23 per cent – suggesting the impact was significant.

A breakdown of the data reveals how Open Banking investments have increased during 2021, with wealth management firms experiencing the strongest increase in budgets (58 per cent).

This is followed by wholesale banks (55 per cent), credit providers (51 per cent) and challenger banks (50 per cent).

Tink said that while at the beginning of last year execs expected to spend on average €50-100 million on achieving their Open Banking objectives, due to the pandemic, the average spend was €32 million in 2020.

Retail banks and wealth management firms bucked this trend, spending on average €84 million and €79 million respectively on their Open Banking objectives in 2020.

“As Open Banking moves towards mainstream adoption, we’re not surprised to see investments in data-driven initiatives increasing,” said Daniel Kjellén, co-founder and chief executive, Tink. “Financial executives have set their sights on a broad range of Open Banking use cases, from payments to credit assessments to carbon tracking, unleashing a new wave of value creation that both consumers and businesses will benefit from.”

Kjellén added: “As we look to 2022, the findings of this report suggest that financial institutions should move fast, as Open Banking is tearing down barriers and allowing new players to enter the market. To keep a competitive edge, it’s important to focus on enhancing the core business, and consider working with partners to create Open Banking solutions that can drive value across all areas of financial services. Creating an ecosystem of players that work together will be crucial as we move towards a new age of digitalisation and enhanced customer experience.”

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