Category: Consumer insights

The Trustee of the Open Banking Implementation Entity (OBIE) has instructed OBIE to develop a Consumer Evaluation Framework (CEF) to properly assess the impact of open banking on retail consumers and SMEs. The framework is intended to provide the basis for measuring the delivery of key consumer outcomes envisaged by the CMA Order and was developed by the Personal Finance Research Centre at the University of Bristol.  

Once the Framework had been developed, OBIE’s next task was to design the analytical approach to populate it and start gathering data. OBIE envisages that the process of fully analysing all outcomes will be a multi-year exercise that requires a phased approach. The first Open banking impact report has been published today, which provides useful and usable outputs. OBIE will continue to build on this foundation in subsequent reports and has committed to delivering it at 6 monthly intervals. 

 Imran Gulamhuseinwala OBE, Trustee of the Open Banking Implementation Entity (OBIE), commented: 

“We have made significant progress since the CMA Order that created the OBIE and launched open banking for UK consumers and small businesses. The technology has now moved beyond the design and build phase, the ecosystem has grown strongly, and open banking is now a service that increasingly benefits millions of people in their daily lives. Notwithstanding this success, there is still more to do to encourage adoption and innovation. To this end, we are fully committed to investigating objective assessments of open banking versus its policy expectations and to communicating these findings transparently to all participants in the ecosystem.”

Read the full report

ENDS 

Notes to Editors:  

*OBIE was set up by the CMA and funded by the UK’s nine largest banks and building societies: Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, RBS Group and Santander. 

Contact: OpenBankingMedia@cicero-group.com, 0207 297 5971 

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. Our trading name is Open Banking Limited. 

We are governed by the CMA and funded by the UK’s nine largest banks and building societies: Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, RBS Group and Santander. 

We work with the UK’s largest banks and building societies as well as challenger banks, financial technology companies, third party providers and consumer groups. 

Our role is to: 

 

28 September 2020. The Open Banking Implementation Entity (OBIE), the body set up by the Competition and Markets Authority (CMA) to deliver open banking in the UK, has today announced that over two million customers are now using open banking-enabled products*. This represents a significant upswing in the use of the innovative banking technology despite the disruptive effects of the COVID-19 pandemic.

OBIE figures show open banking user numbers have doubled since January 2020. There has been a steady increase at a rate of around 160,000 users per month, which only plateaued in April and May when lockdown measures in the UK were introduced, before the strong growth resumed.

Research sponsored by Nesta Challenges’ Open Up 2020 Challenge, shows a sharp increase in the use of money management apps during the pandemic, of which 45 per cent were 25-34-year-olds. According to the survey of 2,000 UK adults in early July 2020, one in five started using online banking apps during lockdown and 54 per cent now use them regularly.

Imran Gulamhuseinwala OBE, Trustee of the Open Banking Implementation Entity (OBIE), commented:

“Open Banking used to be the best-kept secret in financial services. With 2m active monthly users and growing strongly that is clearly no longer the case. We can now see that people want to exercise their rights over their data and will do so, as long as you make it simple and secure. Open banking enabled products are rebalancing the market in favour of consumers and small businesses. Users are now able to engage more with their finances and getting access to better products.”

David Beardmore, Ecosystem Development Director, the Open Banking Implementation Entity (OBIE):

“I’m excited to see the 2 million users threshold passed so quickly. Open banking will revolutionise the way we pay. While open banking payments are currently a small proportion of open banking usage, recent strong growth is a sure sign that people welcome more payments choice. We predict that payments will eventually form a considerable proportion of our growing user numbers.”

Dr Bill Roberts, Head of Open Banking at the CMA:

“When the CMA investigated retail banking, we found banks were not working hard enough for consumers, and so we required them to give people control of their own data. By doing so, we believed this would unleash a wave of innovation and stimulate rivalry.

“The fast growth in personal customers and small businesses using Open Banking during 2020 – and hitting the 2 million mark – is another important milestone towards that goal.”

Open banking can be used in multiple ways to help users access their banking data and better manage their finances. Examples of this include:

The Open Banking App Store, houses more than 80 open banking mobile applications and online products so that consumers and businesses can easily identify the one that best suits their needs.

*According to data provided by the CMA9 (Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, RBS Group and Santander).

ENDS

Notes to editors:

For enquiries, please contact: OpenBankingMedia@cicero-group.com, 020 7297 5965

About 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). Its works with the CMA 9, as well as challenger banks, financial technology companies, third party providers and consumer groups.

OBIE’s role is to:

 

 

New figures published today show that customer use of open banking in the UK has surpassed the one million customer mark for the first time. Customer numbers have grown strongly, doubling in six months.

The legislation that underpins Open Banking, the second Payments Services Directive (PSD2), came into effect two years ago. Following a period of implementation Open Banking technology now allows consumers and small businesses to connect their bank accounts with authorised third parties in a safe and secure way.

Open Banking continues to grow rapidly and has surpassed one million customers who are already connecting their bank accounts with trusted third parties. Open Banking customers generate over 200M monthly calls, driven by over 200 active service providers. In addition to established ‘account aggregation’ players such as Yolt, services now cover personal finance advice, accountancy services, credit rating and charitable donations.

Innovation is further driven by The Open Up 2020 Challenge, run by Nesta Challenges in partnership with Open Banking Limited. The 15 finalists cover an exciting range of new services such as credit rating for renters (Canopy), financial vulnerability protection (Toucan, Kalgera), mortgages (Mojo), charitable donations (Sustainably) and artificial intelligence (Cleo, Plum).  Open Banking is now also moving into the Payments realm, with over 50k payments made last month.

The Open Banking Implementation Entity (OBIE), the entity set up by the Competition and Markets Authority (CMA) to deliver Open Banking in the UK, shows the growth in customers has doubled in six months. These figures only represent customers of the CMA9, the nine biggest current account providers in Great Britain and Northern Ireland*.

Open Banking currently covers personal and business current accounts, credit cards and online e-money accounts. Currently there are 204 regulated providers, up from 100 at the end of 2018.

Imran Gulamhuseinwala OBE, Trustee of the Open Banking Implementation Entity (OBIE), commented:

“One million is a significant milestone, but by no means is it the end. Open Banking is about giving customers access to their data to rebalance the market in their favour. By creating greater competition, we are seeing innovation from new entrants and incumbents, which is leading to greater convenience and crucially greater engagement. We believe 2020 will be the year when adoption of Open Banking financial services really takes off.”

John Glen MP, Economic Secretary to the Treasury and City Minister:

“Open Banking has been a huge success in the UK and has made us a world leader in the technology. From better tracking of payments to stop customers getting overdrawn, to utilising data to improve access to finance, Open Banking has brought real improvements to the people and businesses using it.  I’m now looking forward to seeing even more people benefit from this new technology in the year ahead.”

Christopher Woolard, Executive Director of Strategy and Competition, Financial Conduct Authority (FCA):

“The UK has led the way internationally in the development of open banking, which supports our objective of promoting effective competition in the interests of consumers. We welcome the growth in take up of Open Banking and support its continuing development.

“As we look forward, we also want to consider the potential benefits that could come from giving consumers and businesses control over a wider range of their financial data – so called Open Finance.  We recently published a Call for Input on Open Finance and welcome views on what is needed to ensure it develops in the best interest of consumers and what role we should play.”

Dr Bill Roberts, Head of Open Banking at the CMA:

“It’s great to see that over a million customer are now using Open Banking technology to help them better manage their money. I look forward to many more benefitting from it when it is fully rolled out later this year. Open Banking will continue to transform banking for personal customers and small businesses by offering innovative services that provide people with a simpler and more secure way to gain control over their finances.”

Tahir Farooqui, Founder & CEO, Canopy:

“For our business and customers, Open Banking technology enables renters to track their rental payments and get credit for paying rent by adding rent to their credit score. Our aim is to help millions of renters improve their financial lives by first building a better understanding of rental expenses and corresponding impact on their credit score and savings aspirations. Open Banking has the potential to help millions of renters improve their rental and financial health.”

Loral Quinn, Co-founder & CEO, Sustainably:

“Open Banking has enabled Sustainably to automatically turn thousands of everyday cashless transactions into positive impact for a range of good causes. By simply connecting your card, Sustainably rounds up your spare change instantly, so wherever you shop you’re doing good.  Now connected to 13 of the top UK banks, it provides people a simple, secure way to make micro-giving accessible to all.”

ENDS

Notes to Editors:

*OBIE was set up by the CMA and funded by the UK’s nine largest banks and building societies: Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, RBS Group and Santander.

Contact: OpenBankingMedia@cicero-group.com, 0207 297 5971

About Open Banking Implementation Entity:

The Open Banking Implementation Entity (OBIE) is the entity set up by the CMA in 2016 to deliver Open Banking. Our trading name is Open Banking Limited.

We are governed by the CMA and funded by the UK’s nine largest banks and building societies: Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, RBS Group and Santander.

We work with the UK’s largest banks and building societies as well as challenger banks, financial technology companies, third party providers and consumer groups.

Our role is to:

New research conducted by the Open Up 2020 Challenge reveals half (51%) of people are making a New Year’s resolution to save more, while more than four in ten (44%) want to spend less. With a quarter (26%) having overspent on Christmas in 2019, 42% say they now need to get their finances back on track.

This comes as three in ten (29%) admit they don’t have a ‘rainy day’ fund set aside for emergencies and a similar proportion (27%) feel uncomfortable about their current level of debt. Over half (57%) want to feel more in control of their finances – increasing to two-thirds (65%) of those aged under 55.

Open banking offers people the chance to get personalised, tailored support to help them manage their money by allowing regulated companies to securely analyse their bank data. There is a range of products and services available that use open banking to help people better budget, manage debt, and automate savings.

Six open banking apps to help people get their finances back on track in the new year are:

  1. Creditspring – an affordable credit subscription service offering short-term, interest-free loans to help those with limited savings or persistent debt cope with unexpected expenses.
  2. Moneybox – an innovative app which helps customers save and invest for their future by setting money aside in a range of savings products through round ups or regular deposits.
  3. Moneyhub – a financial management platform, pulling together multiple accounts, offering people actionable insights to improve their financial wellness.
  4. Plum – an artificial intelligence assistant that boosts someone’s bank balance through automated savings, easy bill switching and investments.
  5. Tully – a digital debt adviser for those struggling financially – providing online budgeting, debt advice, flexible repayments and money coaching to alleviate financial stress.
  6. Updraft – a solution which automates day-to-day decisions involved in managing money, designed to help millennial users clear their overdraft, pay off credit cards and save more.

All of these solutions are finalists in the Open Up 2020 Challenge, run by Nesta Challenges in partnership with the Open Banking Implementation Entity. There are 15 finalists in total which have already received £50,000 in funding in addition to non-financial support to help them further develop their product. Between three and four finalists will go on to be named winners in July 2020, receiving a further £150,000 -200,000 each so they can help even more people to manage their money.

Chris Gorst, Head of Better Markets, Nesta Challenges, said:

“A new year often motivates people to make a positive change in their life – whether that’s eating healthier, exercising more, or improving their finances. Luckily for the 26.7 million committing to save more in 2020, there are a range of open banking-enabled apps and tools available to help them take charge of their finances. By providing these apps with secure access to your bank data through open banking, you can get personalised guidance to help you make more of your money and help you reach your goals. Through Open Up 2020, Nesta Challenges is excited to be supporting innovators with impactful ideas that have the potential to truly revolutionise how people manage their money.”

The research also found that nearly half (47%) of people like the idea of using apps and tools to manage their money and 31% of 18-34 year olds plan to sign up to an open banking app this year.

Imran Gulamhuseinwala OBE, Trustee of the Open Banking Implementation Entity (OBIE), commented:

“Since open banking regulation came into effect, we’ve seen a host of innovative products launch to help people improve their finances – whether that’s through better budgeting, automating savings, comparing products, or finding ways to clear debt. We are working with Nesta Challenges on the Open Up 2020 Challenge to encourage even more of these ideas and to help millions more people across the UK improve their relationship with money. While some people are already using these products, in 2020 we want to see even more people take control of their data and, ultimately, their finances.”

For more information about Open Up 2020, and the full list of finalists, visit openup.challenges.org/

-ENDS-

Notes to editors:

For all media enquiries contact:

Robyn Margetts, robyn@seven-consultancy.com OR Emma Harvey, emma@seven-consultancy.com

Methodology: Opinium, on behalf of Nesta Challenges, interviewed 2,000 UK adults between 30 December 2019 and 2 January 2020. Data has been weighted to nationally representative standards.

26.7 million figure calculated based on 51% of ONS mid 2018 population estimate of 52,383,965 people aged 18 and over in the UK.

About Nesta Challenges

Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better.

Within Nesta, Nesta Challenges uses challenge prizes to stimulate innovative solutions to some of the biggest challenges we face. Challenge prizes are a simple but powerful idea. A problem or opportunity is identified, the challenge is publicised and rewards are offered to those who can deliver the best solutions.

Nesta Challenges’ Better Markets team works with regulators, policymakers and innovative enterprises to make markets more competitive and open. We advise regulators and policymakers how regulatory reforms and targeted public investment programmes can work together to achieve greater impact.

About Open Banking Limited

  1. Open Banking Ltd (trading name) was set up by the Competition & Markets Authority (CMA) in September 2016 to fulfil one of the remedies mandated by the CMA following an investigation into UK retail banking.
  2. The CMA’s investigation into the retail banking market (whose findings were published in August 2016) concluded that older and larger banks do not compete hard enough for customers’ business and that Open Banking should deliver a new, secure option for customers to be able to compare the deal they are getting from their bank.
  3. Open Banking was created to enable innovation, transparency and competition to UK financial services. It is tasked with delivering the Application Programming Interfaces (APIs), data structures and security architectures that will make it easy and safe for customers to share their financial records by January 2018.
  4. The data provided by Open Banking will enable developers to harness technology that allows individuals and businesses to share their financial records held by their banks with third parties.
  5. Open Banking is a private body; its governance, composition and budget was determined by the CMA. It is funded by the UK’s nine largest current account providers and overseen by the CMA, the Financial Conduct Authority and Her Majesty’s Treasury.
  6. The 9 mandated institutions (referred to as the CMA9) are: Barclays plc, Lloyds Banking Group plc, Santander, Danske, HSBC, RBS, Bank of Ireland, Nationwide and AIBG.

About the Open Up 2020 Challenge

Open Up 2020 is run by Nesta Challenges and backed by the Open Banking Implementation Entity as part of the UK’s world-leading open banking agenda.

Open Up 2020 is designed and timed to boost consumer awareness and adoption of open banking-enabled products by providing 15 fintechs with up to £300k each, promoting their products in a national digital awareness campaign, and offering expert non-financial support so they can accelerate their solutions.