Seven million people in UK used open banking services in 2022

More than seven million people in the UK used open banking final yr, 5 years after the competitors regulator pressured banks to introduce services.

According to figures, reported to Open Banking Limited (OBL) by the 9 banks and constructing societies that needed to implement open banking performance, two million customers have been added since this time final yr.

Open banking services have been made attainable by the European Union’s Payment Services Directive 2 (PSD2).

In January 2018, UK banks have been required to implement the Competition and Markets Authority’s open banking laws. This led to the event of utility programming interfaces (APIs) in banking to provide customers extra management over their accounts. Through these APIs, third events and a number of finance corporations can use a client’s information to suggest the very best service, together with financial institution accounts.

The finish purpose was to extend competitors in a sector dominated by massive monetary services firms. Customer banking information is shared by the business via APIs, with buyer permission, enabling companies to supply tailor-made merchandise.

Marion King, chair of OBL, which enforces open banking obligations on banks, stated: “Open Banking is nice for the nation, growing competitors and permitting customers and SMEs to profit from new and revolutionary methods to handle their monetary lives.

“As we await key recommendations on the future vision for open banking from the Joint Regulatory Oversight Committee, this strong growth underlines the need to continue the momentum so that the many benefits of open banking are developed, promoted and made available to millions more of our citizens,” she stated.

A complete of 1.2 million of the customers have been doing so for the primary time. “From access to cost-effective credit, building a regular savings habit or making more informed financial decisions, Open Banking is delivering the means for our citizens to improve their financial wellbeing,” stated Henk Van Hulle, CEO at OBL.

While open banking has seen gradual take-up and the event of a brand new sector of fintech, open finance as the following section of open banking will go a lot additional. Open finance will see corporations share information throughout extra services, equivalent to mortgages and loans, additionally through APIs, and supply merchandise and services from exterior organisations.

A survey of about 800 manager-level executives at finance corporations, from IT monetary services software program provider Finastra, discovered that 85% imagine open finance is already having a constructive impact and making the finance sector extra collaborative. Most (80%) imagine the sector is open to collaboration.

The urge for food to develop open banking software program in the monetary services sector has added focus and sources to open banking.

For instance, the acquisition of Danish fintech Aiia by Mastercard in 2021 was an indication that open banking is coming into a brand new section.

The takeover of Aiia – beforehand the Nordic API Gateway – for an undisclosed sum got here sizzling on the heels of Visa’s €1.8bn acquisition of Sweden’s open banking fintech, Tink, in June. Both fintechs at the moment are a part of big international monetary services organisations with alternatives to combine open banking expertise into each nook of client and enterprise monetary exercise.

The acquisition gave Aiia, like Tink after the Visa takeover, the sources to take an idea, typically shrouded in thriller for customers and plenty of companies, to new ranges.

Read extra on IT for monetary services

• SMEs eager on embedded finance, however extra selection wanted to extend take-up

  

  By: Karl Flinders

• Top 10 monetary services IT tales of 2022

  

  By: Karl Flinders

• Lloyds Bank launches innovation sandbox

  

  By: Karl Flinders

• Next section of open banking already gathering tempo

  

  By: Karl Flinders