Report

Open Banking Impact Report May 2022 – key insights on adoption and business use

We’re pleased to publish our third Open Banking Impact Report, which regularly assesses the progress of open banking adoption in the UK and its impact on both consumers and small businesses.

Progress is positive, as the availability – and range – of services continues to expand, and adoption continues to grow.

As part of this report, we have also produced independent research into small business use of open banking-enabled cloud accounting services, and we explore how these services are supporting the management of their accounting needs and business decisions.

Unique research into business use of cloud accounting
We believe this is the first research of its kind, offering unique insights into how seamless access to real-time open banking data is helping to improve financial decision-making, as well as helping to tackle perennial business problems such as productivity and late payments.

You can view the full report here.

Key insights include:

  • Adoption has continued to grow, with 10–11% of digitally-enabled consumers now estimated to be active users of at least one open banking service. This is up from 6–7% in March 2021.
  • In the six months to March 2022, there were 21.1m open banking payments, compared with 6.1m in the same period in 2021. Month-on-month growth is running at around 10%.
  • Availability of services continues to expand, however growth is increasingly coming from participants which are not regulated as Third Party Providers (TPPs), such as agents.
  • In March 2022, there were 128 fully regulated firms with live-to-market open banking-enabled products and services. This figure has remained static since September 2021.
  • The market remains dominated by propositions addressing:
    – improved financial decision-making (40)
    – expanded payments choice (31)
    – better borrowing (23).
  • New data on the availability of products and services offered by agents of regulated TPPs. This is the first time we have included this information and we have identified 142 of these firms offering live-to-market services.
  • Business penetration (11%) is slightly higher than retail (10%), but the gap between the two has closed significantly since 2021.
  • The split between types of open banking usage is 64% data, 30% payments with 6% of customers using both, however business users are more strongly skewed towards data.

Business benefits from open banking
Key insights from our research into business use of open banking-enabled cloud accountancy services allow us to understand, for the first time, the types of businesses regularly using open banking and the benefits they see from it.

It appears that open banking plays a key role in cloud accounting, and 72% of respondents rated the ability to connect to a bank account as an important feature of their cloud accountancy service. A further 58% felt the same about the availability of real-time transactions, a consequence of open banking connections.

“The OBIE’s third Impact Report shows that not only are more small businesses adopting cloud accounting services since the introduction of open banking, but also that these services are helping small businesses become more efficient, make better decisions, and collaborate more effectively with their accountants.” Mark Chidley, OBIE SME Customer Representative

We also know many small businesses find it hard to accurately understand their current financial status. An overwhelming majority (77%) of respondents report that they now have more immediate and accurate insights into their financial position at any given time as a result of using these services.

Mark Chidley, OBIE SME Customer Representative, said: “The OBIE’s third Impact Report shows that not only are more and more small businesses adopting cloud accounting services since the introduction of open banking, but also that these services are helping to address some of the extraordinary challenges which confront small businesses in 2022 and beyond.

This latest research brings valuable insights into the various ways in which open banking-driven cloud accounting services are helping small businesses become more efficient, make better decisions, and collaborate more effectively with their accountants.”

As well as the positive impacts for small businesses, continuing regular monitoring of open banking’s impact represents an essential method of ensuring it delivers for all end-users – both consumers and small businesses.”


Research methodology

This report is intended to provide regular insights into the development of open banking in the UK, focusing on outcomes for end users. It is built using a methodology developed by the Personal Finance Research Centre at the University of Bristol. The insights are based on a number of data sources and research studies which are detailed in the methodology sections. Because of the fast pace of change and difficulty in definitively establishing end user outcomes, findings are indicative and should be used for information purposes only. For more information on the research design, please view the full report.

You can read our previous Open Banking Impact Reports here: