Keeping pace with the growing global trend of open banking, Mastercard Inc. MA announced that it will acquire Aiia, a leading European open banking technology provider. Aiia provides a direct connection through a single API to more than 2700 banks across Europe to its bank, fintech and payment firm clients.Following this news, the stock gained 1.32% in the last trading day.What is Open Banking?Open banking refers to the sharing of financial data of account holders with third party financial service providers through a secured Application Programming Interface (API).Customers’ data shared with their consent are then analyzed by the financial services providers to gain a deeper understanding of their behavior, preferences and values. These are then used in creating personalized solutions and services for them.The idea behind this bank-fintech arrangement is to provide a much higher level of customization and personalized services to customers at a lower cost. Open banking is part of the second payment service directive (PSD2), which the financial institutions are compelled to comply with in the European Union. Growing digitalization and customers’ desire to get customized products and services are the main drivers of the open banking concept, which the traditional banking were incapable of.Big-Time Adoption of Open BankingIn the European Union (EU), banks are mandated to transition to open banking for fostering innovation and empowering consumers. However, the main hindrance to this form of banking is customers’ apprehension to share their details for the fear of identity theft and monetary loss. Thus a reliable and trusted source can allay these misgivings of customers.Mastercard is creating its presence in the open banking space by providing its technology platforms, data connectivity and infrastructure, which will be combined with data privacy and security principles in the process of data transfer in open banking.According to Visa, trust in the financial institution, consumer education and consent plus the ability to transparently monitor and control the usage of data are the critical pillars of ensuring success in open banking.Mastercard: A Huge Supporter of Open BankingThis payment processor is an early advocate of open banking. The hallmark of a leader is to spot the potential opportunity and immediately align with it to ride the industry growth wave. On this front, Mastercard is taking part in this revolution with all guns blazing. In 2019, the company launched its first open banking connectivity offering in the UK and Poland through a partnership with Token.io, an open banking payments platform.Then in 2020, it gained another major footprint in the open banking space with the acquisition of Finicity that connects users' bank accounts with other payment apps.The company’s commitment to open banking continued with the buyout of clearing and instant payment services, and the e-billing solutions of Nets’ Corporate Services business in 2021. This will strengthen Mastercard’s account-to-account (A2A) payment capabilities. Mastercard’s predecessor Visa Inc. V is also taking deep plunges in the open banking space to cement its leadership position in the payments processing space. To this end, it already acquired Tink, which just like Aiia, provides data transfer via API to third parties.The participation of payment facilitators in the domain of open banking is also imperative to retain their position in the changing financial transaction services industry. The advancement of open banking can reduce the usage of cards, which are now widely circulated to make payments. Participation in open banking will create new revenue streams.Mastercard is steadfast in moving along with the shifting industry. It is also aiding crypto currency and to this end, recently partnered with the U.S. cryptocurrency exchange Gemini to launch the first credit card . This card will reward its users in digital currency on the purchases made this year.Mastercard’s strong brand name, vast global business and a solid cash generating capability make it an investor favorite. Funds are intelligently deployed to strategic initiatives like investment in technology, execution of acquisitions and addition of shareholder value through share buybacks and dividend payments.Year to date, the stock has dipped 3.4% compared with its industry’s decline of 12.8%. Other stocks in the same space including American Express Co. AXP and Discover Financial Services DFS have, however, gained 32% and 33%, respectively, in the same time frame.Image Source: Zacks Investment ResearchMastercard carries a Zacks Rank #3 (Hold), currently. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100S of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mastercard Incorporated (MA): Free Stock Analysis Report Visa Inc. (V): Free Stock Analysis Report Discover Financial Services (DFS): Free Stock Analysis Report American Express Company (AXP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research