Over 11 million UK payments were made using open banking technology in July, more than double the number during the same month last year.
According to the latest figures from Open Banking Limited, there were 11.4 million open banking payment transactions, representing 9.3% increase on the previous month and 102% growth compared to the same period a year before.
The number of active payment users surged reached 4.2 million in July, which was a 10.5% higher than the previous month and a 68.2% increase on July last year.
In 2018, UK banks were required to implement the Competition and Markets Authority (CMA) open banking regulations, which led to the development of application programming interfaces (APIs) in banking to give consumers more control over their accounts. The end goal was to increase competition in a sector dominated by big financial services companies. Customer banking data is shared by the industry through APIs, with customer permission, enabling businesses to offer tailored products.
Open Banking Limited, previously known as the Open Banking Implementation Entity (OBIE), was set up by the UK Competition and Markets Authority to create application programming interfaces, data standards and the governance structures to support the UK’s implementation of open banking.
Marion King, chair of Open Banking Limited, said the strong and sustained growth in open banking payments underscores the rapid pace at which open banking is reshaping the financial and payments landscape: “It reinforces the pivotal role open banking plays in driving financial inclusion, innovation, and consumer empowerment.
“As open banking continues to redefine the way people manage their finances, the doubling of total payments in just one a year is a remarkable achievement and testament to the transformative impact of open banking.”
Competition and Markets Authority CEO Sarah Cardell, said: “It is fantastic to see how many consumers have benefited from open banking since the CMA’s retail banking market investigation order was issued in 2017. Open banking has transformed the way millions of people manage their money and today’s announcement is further evidence of the significant progress that has been made since 2017.”
According to a recent report from independent advocacy group the Coalition for a Digital Economy, more than 4,800 people work in open banking in the UK, and the industry raised over £886m last year.
While open banking has seen gradual take-up and the development of a new sector of financial technology (fintech), the next phase of open banking – known as open finance – will go much further. Open finance will see firms share data across more services, such as mortgages and loans, also via APIs, and offer products and services from external organisations.
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