Thought Leadership

OBL at Open Banking Expo 2023 – show highlights

24 October 2023

Last week’s Open Banking Expo in London once again highlighted the remarkable work of the open banking ecosystem in the UK, and beyond. Some of the key themes this year included the UK’s Open Banking Standard and the positive example that it provides to the rest of the world, the importance of trusted frameworks and accessible data. Keynote speaker Lord Holmes advocated for open banking for the public good, and pointed out that: “It is all about the data – that’s the golden thread for open banking, open finance and artificial intelligence.”

For the first time, Open Banking Limited (OBL) supported the ‘Future Stage’ which provided us with the ideal platform to showcase the potential of open banking and how it can deliver benefits across financial services and other economic sectors such as energy, retail, transport, telecoms, water and more.

On the second day, we published our latest Impact Report. Report authors, Richard Koch, OBL Senior Policy Lead, and Daniel Jenkinson, OBL Policy Manager, shared the unique insights on open banking availability and adoption on the Expo’s Main Stage. The report detailed that over 1 in 9 (11%) of British consumers are active users of open banking, along with 17% of small businesses. For consumers, growth in use is driven through open banking apps – most recently, lending propositions and tax apps – while business growth is driven via data, primarily through accounting.

This growth is also evident through the number of payments, which increased by 88% in June of this year to 9.7 million compared to the same month in 2022, and the upwards trajectory continues with further growth of 10.8 million payments made in August. For the first time, additional data from Pay. UK showed that the total monthly value of open banking payments is sitting at around £4.5 billion – a game changer for how payments are made in the UK. While these statistics highlight the progress that has been made in open banking, the team pointed out the importance of unlocking access to all services to drive further uptake and cross-sector collaboration.

Regulatory pause

Elsewhere, OBL CEO Henk Van Hulle vigorously refuted any notion that the UK is ‘losing its open banking crown’, reminding the audience that the UK built a well-trusted Standard and ecosystem in just five and a half years, adding that it is taking a “regulatory pause” to learn from other jurisdictions before it accelerates again. He predicted that we will see payments double in just two years.

He praised regulators for the progress so far but urged the industry to step up to make the future of open banking happen, emphasising the need for the Data Protection and Digital Information Bill (DPDI) (currently in report stage) to be passed into law next year.

Heather Xiao, OBL Product and Operations Director, discussed the challenges related to data reliability from multiple sources and praised the UK’s Open Banking Standard and trust framework which helps to ensure the ‘secure’ data sharing within the open banking ecosystem. She also advocated for business models to prioritise customer value and superior experiences.

Consumer protection
Consumer education and protection were consistent themes throughout the two-day event, with near-universal agreement that more needs to be done on both scores.

Richard Mould, OBL Senior Strategy Lead, spoke about this on the lively consumer protection panel, likening the current situation to having two buckets: one for purchase protection, for example, if you’ve ordered red trainers and received blue ones, and one for payments protection, when something goes wrong with the payment, for example, if the funds were sent to the wrong account.

He said there is protection through existing regulation for the former, but that the industry needs to “sort out the plumbing between banks and third party providers”, adding that the Direct Debit guarantee was a good example of how this could work. The former is a policy decision, and we need to think carefully about where the risk lies, how the risk can be controlled and who pays for the protection.

“VRPs are good for everybody”

As with previous Expos, variable recurring payments (VRPs), the pioneering payment instruction, continued to be a hot topic. Jane Moore, Head of Department, Payments and Digital Assets, at the Financial Conduct Authority said that “VRPs are good for everybody” – merchants and consumers – as they increase competition between payment systems, and allow merchants to price goods better.

NatWest added that the industry needed to give customers the confidence to click on a VRP and urged other banks to get on board with commercial VRPs. There was broad (but not universal) agreement that while VRPs are an enabler to escalate growth, and to create an API economy, they need to be mandated across the board.

Overall, the Expo provided a valuable opportunity for members of the open banking ecosystem to meet and discuss the future of open banking as it continues to evolve. It was even suggested that next year the show is re-named to ‘Open Finance’ or ‘Open Everything Expo’!