Open Banking: Evolution, Global Development, and Challenges in China

Open banking is continuously evolving, pushing the banking sector into a new stage of ecosystem‑based competition.

1. Open banking reshapes the banking development model and is the inevitable path toward the future "Bank 4.0". Gartner defines it as a platform‑based business model that shares data, algorithms, transactions, processes, and other functions with the commercial ecosystem, emphasizing the keywords "ecosystem", "sharing", and "platformization".

Compared with traditional direct‑sale or internet banks, open banking goes beyond channel or single‑business digital transformation; it emphasizes deep openness of overall bank capabilities and comprehensive cooperation with ecosystem partners. By sharing information services, banks can deeply coordinate financial services with partners' capabilities, integrating finance into daily life and delivering more efficient, convenient, and comfortable experiences, as described in Brett King’s "Bank 4.0".

2. Globally, open banking is booming, and China has entered a rapid development phase. More than 30 countries or regions are exploring open banking, with the US, UK, and EU leading through regulation‑driven models. The UK released the first open‑banking standards, and the EU’s PSD2 legislation accelerated data openness. In the Asia‑Pacific, Hong Kong and Singapore illustrate government‑guided openness, with Hong Kong’s regulator mandating API releases in four phases and Singapore encouraging banks to connect directly with large ecosystem enterprises.

In China, the exploration began on the basis of online banking models, leading to open‑banking architectures. Since 2015, internet banks such as WeBank, MyBank, Xinwang Bank, and Yilian Bank have adopted open‑banking systems using APIs, SDKs, and H5 for external data interaction, becoming pioneers. From 2018 onward, open banking entered a rapid growth stage, with state‑owned and large commercial banks accelerating transformation; nearly 100 banks have launched or are building open‑banking services.

3. Open banking faces new challenges but remains the future trend for banks. The challenges include:

Security: Open connections increase data leakage and information‑security risks compared with traditional closed systems.

Connection efficiency: More partners require standardized interfaces and technical coordination to enable convenient, high‑efficiency deployment.

Business continuity: The open model imposes new requirements on financial‑service continuity, demanding appropriate technology and governance.

Despite these challenges, the deep application of cloud computing, big data, artificial intelligence, and blockchain in open banking continuously improves technical implementation and assurance capabilities. FinTech becomes a key driver, enhancing API development, invocation efficiency, and accelerating the opening of accounts, payments, and technology services, making early and rapid openness a strategic imperative for banks.