Partner POV | Strategic Openness is Banks' Next Competitive Differentiator

This article was written by Chad Davis, Senior Solutions Marketing manager - Financial Services Sector at F5, and was submitted for publication by our partner, F5.

With open finance initiatives gathering momentum globally, forward-thinking banks around the world have advanced beyond viewing more open ecosystems through the lens of regulatory obligations or passing trends. As highlighted in Twimbit's recent "2025 Global State of Open Finance" report sponsored by F5, more than 132 million users worldwide are now actively engaged in open finance, producing more than 330 billion open banking payment transactions annually. Such remarkable figures underline an inescapable new reality for banks: strategic openness is no longer optional—it is rapidly becoming instrumental to future competitiveness, innovation, and relevance.

Shifting Mindsets from Passive to Proactive

Banks historically have prioritized cautious approaches aimed at careful risk management and incremental innovation, which makes sense for inherently risk-aware institutions. Yet cautiousness cannot translate into hesitation. While observing regulatory developments and waiting for market clarification may have worked in the past, it is now a recipe for lost market share in today's fast-paced open finance environment.

The Twimbit report, which features a Global Open Finance Maturity Index—evaluating open finance readiness across 32 countries—demonstrates a clear divide between nations categorized as "Champions," where regulatory frameworks clearly define open finance pathways, and "Enthusiasts," where market-driven innovations operate ahead of regulatory clarity. Yet, in both categories, proactive and deliberate openness—rather than waiting passively for regulations to dictate actions—is proving to be a defining factor in success.

Countries such as the United Kingdom, Brazil, India, and Singapore are championing regulatory clarity and simultaneously allowing room for proactive strategic innovation. Meanwhile, Enthusiast nations like the United States, China, and Indonesia illustrate vividly how financial firms are thriving through proactive engagement with partners and ecosystems, creating products and services that anticipate and shape consumer demand rather than merely reacting to it.

Turning openness into banks' key strength

Banks enjoy unparalleled strengths: customer trust built over decades, sophisticated risk management expertise, deep regulatory experience, and mature governance processes. These strengths uniquely position them to lead the strategic shift toward openness in financial services—not by abandoning control, but rather by deploying an evolved, strategic form of it. Rather than viewing openness as surrendering autonomy or creating vulnerability, banks should understand it as a means to extend their trusted reputation and robust risk culture across broader ecosystems.

For instance, JPMorgan's partnership with Walmart in embedded payments through the Walmart Marketplace has enabled U.S. merchants to seamlessly manage payments and cash flow in JPMorgan's robust infrastructure. Another example is Santander UK which scaled card repayment innovation with embedded payments offered via a partnership with Token.io. The collaboration allowed customers to initiate repayments directly from over 90 UK banks without leaving the Santander mobile app.

Global Innovation Still Heavily Influenced by Strategic Regulatory Frameworks

While proactive and deliberate openness is paramount for banks in their open finance approach, regulatory frameworks still have a significant impact. Several leading nations have established clear regulatory frameworks to empower banks and fintech companies and accelerate innovation:

• The UK has outlined strategic milestones with its Joint Regulatory Oversight Committee's roadmap for 2025, complemented by legislation such as the Data (Use and Access) Bill. This has provided a robust foundation for open finance and embedded finance initiatives, fueling market potential estimated at approximately $13 billion in the growing field of "smart data."
• In India, broad adoption of open finance solutions is spearheaded through proactive government-led infrastructures including India Stack and the Account Aggregator framework. By streamlining secure transfers of consumer data, these initiatives boost financial inclusion and facilitate the growth of business models centered around customer needs.
• Singapore demonstrates regulatory excellence via market-oriented governance under the direction of the Monetary Authority of Singapore (MAS). MAS encourages innovation through adaptable API standards, supportive regulatory sandboxes, and ecosystem collaboration, cultivating a dynamic and innovative financial ecosystem.
• Brazil continues to leverage its groundbreaking Open Finance initiative, which currently processes more than 96 billion API calls per month. Looking ahead, Brazil plans to introduce Banking-as-a-Service (BaaS) regulatory frameworks and further enhancements to its successful instant payment network, Pix. These steps explicitly aim to foster greater financial inclusion, transparency, and interoperability, placing Brazil at the forefront of open finance innovation worldwide.

These international examples highlight one clear takeaway: carefully calibrated regulatory leadership significantly drives financial industry transformation, creating clarity and consistency around data-sharing practices, and enabling innovative banking and fintech businesses to thrive.

Addressing the Elephant in the Room: Security, APIs, and AI

Naturally, as the financial industry moves towards more integrated, data-rich and ecosystem-oriented structures, there are legitimate concerns over risk exposure. Recent API-related incidents at prominent organizations, including Trello, Honda, and others, underscore this risk. Banks must understand, however, that these security challenges do not undermine the compelling case for openness. Rather than shying away from openness, they can reinforce the need for purposeful openness, accompanied by robust API security, continuous governance, and clarity around security standards and interoperability requirements.

Furthermore, the convergence of APIs and artificial intelligence (AI) in open finance ecosystems presents banks with opportunities to enhance personalization, streamline compliance, and truly embed their services invisibly into customer journeys. With the right security practices and clear governance, banks are in a unique position to manage this convergence effectively—better, in fact, than more lightly regulated fintechs.

An Invisible but Integrated Future Awaits

Twimbit projects that embedded finance alone could approach a global market size of around $7.2 trillion by 2030, serving over one billion users worldwide. Such a rapid trajectory compels banks not just to adapt incrementally but to reconsider how strategically and deliberately openness can power their growth and differentiate their brand.

To seize these opportunities, bank leaders must actively collaborate with regulators, ecosystem partners, and technology providers—understanding their role less as defensive gatekeepers and more as proactive ecosystem orchestrators. Industry standards like the Financial Data Exchange (FDX), secure API architecture guidelines, and robust AI governance should become an integral part of every banks' strategic playbooks.