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Numbers stack up for UK open banking three years on

Three years have passed since open banking regulations came into force and momentum is gathering

Nearly six billion calls were made from fintech application programming interfaces (APIs) to bank servers in the UK in 2020 and more than four million open banking payments were completed.

Figures from the UK’s Open Banking Implementation Entity (OBIE) said more than four million open banking payments were made in 2020, compared with 320,000 in 2018, and nearly six billion API calls were made to servers in the UK, compared with just 66.8 million in 2018.

After three years of the UK’s open banking regulation, the OBIE also revealed that about 300 fintech firms currently offer open banking services and 2.5 million consumers use them, with hundreds of thousands of new users added each month.

In January 2018, banks were required to implement the Competition and Markets Authority’s (CMA) Open Banking regulations. This led to the development of APIs in banking to give consumers more control over accounts. Through these APIs, third parties and multiple finance firms can use a consumer’s data to recommend the best service, including bank accounts.

The end goal was to increase competition in a sector dominated by large financial services companies. Back in 2016, the British Banking Association said opening up data from everyday banking transactions had the potential to revolutionise the way consumers and businesses manage their money. “Making more bank data openly available will make it easier for people to shop around for products tailored to their needs and get the best deals,” it said.

Now entering its fourth year, “open banking is well on its way to revolutionising the way individuals and businesses can use their financial data for their benefit”, according to the OBIE.

Imran Gulamhuseinwala, implementation trustee at (OBIE), said: “We have worked hard to develop the open banking infrastructure and functionality over the past three years and our significant progress is reflected, not only in the millions of active users of open banking technology each month, but in the sustained momentum of growth we are seeing.”

Read more about PSD2 and open banking

  • The government’s Competition and Markets Authority has requested feedback on proposals to increase competition in the UK banking sector.
  • The Competitions and Markets Authority opens up the banking apps market following an investigation into how to create greater competition in banking.
  • With the EU’s Payment Service Directive (PSD2) going into effect in January 2018, banks have no time to waste in preparing for the changes it will bring.
  • The UK retail banking sector is at the beginning of a journey towards to a more competitive future as new regulation hits them.

The CMA described the growth in the number of open banking users as “remarkable”. 

A statement from the regulator said: “Three years ago, we ordered banks to give people control of their own data to help transform the industry, driving innovation and stimulating rivalry. Today, more than two and a half million people are using open banking, with new customers coming on board every day. This is a remarkable achievement and still only the beginning for how far we can take this technology.”

In June, the OBIE launched the Open Banking App Store to help people find the right open banking-enabled financial products for them. The market now has 96 live apps and services.

Other key achievements include the fact that 50% of SMEs surveyed by OBIE have taken up open banking services since the start of the Covid-19 pandemic and a request from HM Revenue & Customs to the OBIE about how open banking can be used in the delivery of public services.

“While there is still much to be done, individual consumers and small businesses are already seeing the benefits of the ecosystem and functionality we have put in place,” said Gulamhuseinwala.

Read more on IT for financial services

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