- 300 fintechs and innovative providers have joined the ecosystem
- More than 2.5 million UK consumers and businesses now use open banking-enabled products to manage their finances, access credit and make payments.
- Every month, hundreds of thousands of UK consumers and businesses become new active open banking users
- API call volume has increased from 66.8 million in 2018 to nearly 6 billion in 2020
The UK’s Open Banking Implementation Entity (OBIE), the body tasked with designing open banking technology in the UK, today marks the third year since open banking became a regulatory requirement. The aim of this regulation was to increase competition and choice for consumers and small businesses.
Since its inception, the OBIE has worked closely with the Government and regulators to create a world-leading ecosystem, helping to maintain the UK’s position as one of the world’s most innovative and competitive financial markets. Open banking is well on its way to revolutionising the way individuals and businesses can use their financial data for their benefit. Since 2019, the number of third-party providers (businesses who use open banking technology) in the ecosystem has grown to 294.
The number of API calls has increased from 66.8 million in 2018 to almost 5.8 billion in 20201. Cumulatively, API call volumes reached over 7 billion between 2018 and 2020. 320,000 open banking payments were made in 2018, this has subsequently risen to over 4 million in 2020. The first business loan using open banking data was issued in November 2018, throughout 2020 TPPs routinely used open banking data to help consumers assess and boost their credit scores.
Today, more than 2.5 million people use open banking to move, manage and make the most of their money. This number has continued to grow as the technology has become more embedded and easier to use. From one million users in January 2020, the number doubled to two million in August 2020, and with the ecosystem set to hit three million shortly, has continued to show growth of 1,000,000 new users every six months.
Commenting on the progress of open banking in the UK so far, Imran Gulamhuseinwala OBE, Implementation Trustee, The Open Banking Implementation Entity (OBIE), said: “Open banking used to be the best kept secret in financial services. 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. We have developed a world-leading, thriving ecosystem of nearly 300 regulated providers, who collectively are bringing innovative new products and services to market.”
A CMA spokesperson described the growth of open banking users as remarkable: “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.”
Open banking implementation is now in its final stages, with the past 12 months predominantly focused on improving both functionality and usability so that more customers can make use of the technology. The number and range of new product offerings has also increased substantially: as of December 2020, 294 regulated providers are now in the ecosystem, of which 102 have live offerings in the market2. Consumers and businesses can use the Open Banking App Store to explore which open banking-enabled products are right for them.
- Implementation roadmap: In 2020, the final stages of the implementation roadmap was approved. Consequentially, important payments functionality such as refunds will be delivered, and performance and reliability will be enhanced.
- Ecosystem product innovation: In April, the OBIE launched the Power of the Network campaign to promote and showcase how the open banking ecosystem was responding to the COVID-19 crisis with products and services that could assist those affected.
- App Store: In June, the OBIE launched the Open Banking App Store to help individuals and companies find the right open banking-enabled financial products for them. The app store currently lists 96 apps and services that are live to market.
- Nesta Open Up Campaign: In October, four open banking fintechs were announced as the winning finalists of the Open Up 2020 Challenge. This programme, run in association with our partners Nesta Challenges, promoted open banking-enabled solutions for individual users and built on a similar programme aimed at SME users in 2019.
- SME Financial Landscape Report: In December, the OBIE published research showing that, since the start of the pandemic, the UK’s small business community is increasingly utilising the services offered by open banking providers as they look to future-proof their business operations (50% of those surveyed). Furthermore, the research identified an increase in product switching and small business borrowing.
- Public sector: In December, HMRC launched a request for information exploring the potential use of open banking to deliver public services.
Mr Gulamhuseinwala concluded: “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. This work serves as a natural blueprint for how the ‘open’ philosophy can be extended to everything from open finance to open telecommunications, thereby giving customers greater control and greater benefits.”
Notes to editors:
The legislation that enabled open banking in the UK took effect on 13 January 2018, when PSD2 came into effect.
- This meant regulated TPPs could start to integrate with APIs that had been developed by the CMA9, allowing them to conduct the technical tests necessary to start bringing propositions to market later that year.
- This was, in effect, a soft launch: while it enabled the possibility of open banking, a huge amount of work still needed to take place to develop the Roadmap, comply with regulation and develop the ecosystem infrastructure.
- In January 2018, Version 1 of the Open Banking Standard was available to TPPs. Version 3, which enabled the bulk of PSD2 compliance, was issued in September 2018.
The first APIs were implemented by the banks in January 2018, with third party providers appearing in the market soon after and making significant progress in 2019. The CMA was responsible for establishing the legal framework and the OBIE was mandated to ensure the effective implementation of open banking in the UK. This coincided with the introduction of the Second Payment Services Directive (PSD2) across Europe.
API stands for ‘Application Programming Interface’. It is a secure connector that allows users to plug into a database and pull information. In the example of an app such as National Rail’s, an API allows users to run an enquiry, for example, ‘When is the next train from Kings Cross to Edinburgh?’ The API then connects the user to a central database of train timetables and displays the results. In the world of banking, these APIs allow fintechs to securely pull only relevant transaction details, which it can then use in its own apps.
1 See OBIE API data: https://www.openbanking.org.uk/providers/account-providers/api-performance/
2See OBIE December 2020 ecosystem infographic: https://www.openbanking.org.uk/about-us/latest-news/obie-highlights-december-2020/
Spokespeople available upon request.
For enquiries, please contact: CiceroOpenBankingPR@cicero-group.com, 020 7297 5965
About the Open Banking Implementation Entity:
The Open Banking Implementation Entity (OBIE) is the entity set up by the CMA in 2016 to deliver Open Banking. Its trading name is Open Banking Limited. OBIE is governed by the CMA and funded by the CMA9 (Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, RBS Group and Santander). It works with the CMA 9, as well as challenger banks, financial technology companies, third party providers and consumer groups.
OBIE’s role is to:
- Enforce the obligations on the CMA9 under the CMA Order
- Design the specifications for the Application Programme Interfaces (APIs) that banks and building societies use to securely provide Open Banking
- Support regulated third party providers and banks and building societies to use the Open Banking standards
- Create security and messaging standards
- Manage the Open Banking Directory which allows regulated participants like banks, building societies and third-party providers to enrol in Open Banking
- Produce guidelines for participants in the Open Banking ecosystem
- Set out the process for managing disputes and complaints