How open banking is driving regional growth and prosperity across the UK 

19 May 2023
Thought leadership

At the beginning of London Fintech Week in April, City Minister Andrew Griffith made a bold statement, declaring that “this will be the year for delivering the next generation of open banking”. As Chair and Trustee of Open Banking Limited (OBL), I couldn’t agree more. Open banking has already transformed the financial landscape, and we are now on the brink of something even bigger: ‘open everything’. 

The potential of ‘open everything’ is incredibly exciting, with planned legislation to enable data sharing across all industries – from finance to utilities – to create a truly connected economy. But before we can achieve this, we need to continue driving open banking forward and deliver further benefits for consumers and businesses up and down the country.  

I was thrilled to attend the Open Banking Summit in Manchester recently, hosted by FinTech North and Open Banking Excellence. With over 90 delegates from across the Northern fintech community attending, it was fantastic to see how open banking has become a catalyst for innovation and growth in all regions across the UK. This includes Manchester, a city that has been a real powerhouse for fintech innovation and which is now fully embracing open banking as a driving force for economic growth and prosperity. 

Open banking has been a game-changer for consumers and small businesses, thanks to the collaborative approach taken by regulators and industry players in the UK. But it’s not just about innovation and collaboration – our regulatory framework has also played a critical role in fostering competition and driving consumer benefits. 

The Competition and Markets Authority (CMA) played a pivotal role in mandating participation in open banking and setting a standard for performance. This pro-competition intervention ensured that we went faster and achieved more than our European counterparts. This helped to create an environment where fintechs and traditional financial institutions can compete on a level playing field, driving innovation and improving services for consumers and SMEs. 

Research in our latest Impact Report shows that the number of open banking providers has increased across the UK, with 169 regulated providers and 204 third-party providers as of March 2023.

To date, there are over 1,400 fintechs operating outside of London, demonstrating the reach and success of the UK’s thriving fintech sector. The North-West and Scotland are home to the largest number of open banking providers, with 24 and 23 providers, respectively, as well as thriving fintech hubs. 

The North-West has also seen the largest increase in open banking adoption, with a 280% increase in API calls between Q4 2021 and Q4 2022. And it’s not just Manchester – Liverpool, Leeds, Edinburgh, Birmingham and many other places are also seeing a boom in fintech activity, with a rising number of companies setting up shop in those cities.

Our report highlights case studies of open banking use across the UK, including a social housing provider in the North-East using open banking to improve rent collection, and a small business in the South-West using open banking to streamline accounting and invoicing.  

While the technology has played a significant role in fostering innovation and growth in regions outside of London, we cannot stop here. These hubs are not just important for their local economies, but for the UK as a whole. We must continue to push the boundaries and use open banking as a tool to level up the regions and improve financial inclusion across the UK. This means ensuring that all areas of the country have access to the latest fintech innovations and that everyone can benefit from the advantages that open banking brings. 

The COVID-19 pandemic highlighted the need for financial services to be more accessible, and open banking has provided a key solution, allowing for the development of digital financial services that can reach more people in need, regardless of location or financial background. 

To achieve our goal of ‘open everything’, we must continue to work collaboratively as an industry and with the regulators to create an environment that encourages innovation and competition. We must also continue to invest in education and training, ensuring that people have the necessary skills to take advantage of the opportunities offered by open banking. 

I am proud to be part of the open banking revolution and to see how it has positively impacted financial services in the UK. Open banking has the power to level up the regions and improve financial inclusion across the country, and I am committed to ensuring that we continue to support this.