South Korea Open API Market

Market Overview

The South Korea open API market size was valued at USD 55 million in 2022 and is projected to reach USD 200 million by 2031, registering a CAGR of 15.3% % during the forecast period (2023-2031).

Highlights

• The web API segment dominated the market by product. 
• BFSI dominated the market based on application.

API stands for application programming interface and is an essential component of software developers' technology. It is also commonly known as a public API or open-source technology, but open-source technology and an open API are distinct. The interface component of an API is a system that enables two or more software programs to communicate and interact without encountering any communication issues.

Open Application Programming Interface (API) or external API is a form of Application Programming Interface (API) readily accessible to third-party developers or with limited restrictions. Open API assists developers in integrating APIs with open-source data and associated services for application development. Notable end-users of the open API include the IT and telecommunications industry, banking, financial services, insurance (BFSI), and healthcare.

Market Dynamics

South Korea Open API Market Drivers

The E-commerce Industry's Reliance on APIs as a Foundation

According to data released by insiderintelligence.com, the e-commerce industry has experienced exponential development over the past few decades. In 2022, the global e-commerce market was anticipated to tally USD 5.7 trillion. This number is anticipated to rise over the next few years, demonstrating the increasing success of borderless e-commerce for online retailers. In 2017, online purchases accounted for only 17.8% of total sales, a percentage that is projected to increase by 3% to 20.8% by 2023. In addition, it is anticipated that growth will continue, reaching 23% by 2025, a 5.2-percentage point increase in just five years.

South Korea Open API Market Restraints

Lack of Industry-Wide Consistency

The open banking, IT and telecom, and retail sectors have created a tremendously lucrative opportunity for open API usage. In 2021, Omdia surveyed payment issuers/acquirers about their organization's attitudes and plans regarding real-time payments and the creation of open APIs; more than 70% of respondents agreed that they view third-party developers and third-party providers (TPPs) as a new customer base and that their organization has a clear strategy regarding open APIs. This is a positive development, but providers are nearly equally likely to be concerned about the security of alternative payments. More than sixty percent of respondents are concerned about the security of open APIs, likely due to rising data protection regulations.

South Korea Open API Market Opportunities

Demand Increasing for Real-Time Payment Systems

The need for data management and operations transparency is increasing in the contemporary digital era. This circumstance has created an urgent need for real-time payment systems and technology. This model no longer exists. Previously, the FTP server converted transactional data into batch files for sharing and access. Consequently, there is a rising demand for a public API that serves as a foundation for real-time data exchange. BBVA, for example, is a leader in this field because it has effectively published its entire banking infrastructure on the Internet so that other companies can innovate. This change reflects the software industry's broader shift from products to platforms, which enables problems to be solved more quickly, efficiently, and comprehensively.

Regional Analysis

Access to Korea's financial payment system was restricted, necessitating a distinct contract with each bank in order to obtain full system access. In addition, excessive fees imposed on fintech companies made it difficult for them to release and operate innovative services.

Based on the "essential facility doctrine," which requires the owner to allow competitors access and use of the essential facility in order to increase competition among essential facility owners while maximizing consumer benefits, the Financial Services Commission (FSC) sought means to ensure fair access and use of payment networks where a natural monopoly exists.

Open banking is a joint open infrastructure in the banking sector that operates core financial services in a standardized open API to offer fintech services to consumers at a reasonable price without requiring banks and fintech firms to form partnerships. Six APIs provide core financial services such as inquiry and transmission.

Segmental Analysis

The South Korea open API market is segmented based on product and application.

Based on product, the open API market is segmented into– Web API, Local API, and Program API.

The web API dominates the market and is expected to grow at a CAGR of 16% during the forecast period.

Based on application, the open API market is segmented into– BFSI, government, media and entertainment, IT and telecom, healthcare and life science, and others.

BFSI dominated the market and is expected to register a CAGR of 16.5% over the forecast period.

Recent Developments

• November 2022- Axway announced new data from its inaugural Open Everything Strategy Survey Report. Nearly 40% of firms are in the process of adopting a new hybrid approach for their IT infrastructure, according to a poll of almost 1,000 IT leaders, architects, and developers about their digital strategies and top issues.
• November 2020- Twilio acquired Segment.io, Inc., the market-leading customer data platform. Segment.io provides businesses with a unified customer view to understand their customers better and engage more effectively, enabling us to drive personalization at scale.