Over 1 in 9 Brits now use open banking services as open banking payments reach record high 9.7m payments made in June 2023, an increase of 88% on the same month in 2022. We have seen further growth since the cut-off point for this report (June 2023), with 10.8m payments made in August 2023. Double the volume of payments in the first six months of 2023 than was seen in the first six months of 2022. The average transaction value of open banking payments is around £450, meaning the total monthly value of open banking payments is around £4.5bn. Over 1 in 9 (11%) British consumers are active users of open banking, and 17% of small businesses. Financial decision-making, payments and borrowing account for 75% of all propositions. Open Banking Limited (OBL) has today published its latest Open Banking Impact Report, which covers the six months to June 2023. For the first time, enhanced data from Pay.UK shows that the total monthly value of open banking payments is sitting at around £4.5bn – a game changer for how payments are made in the UK. Adoption of open banking continues at pace, with over 1 in 9 (11%) British consumers becoming active users, up from around 7% in December 2021. Small businesses continue to lead the way in open banking adoption, with a record high of 17% active users. The rapid rise in adoption is testament to the power of open banking technology to empower innovation, increase productivity, create efficiencies, and reduce costs. The first six months of 2023 saw double the volume of payments compared with the first six months of 2022. A record 9.7m payments were made in June 2023, an increase of 88% on the same month in 2022. OBL Chair and Trustee, Marion King, commented: “It is exciting to see the increased adoption of open banking. The latest data shows this has been driven by payments, alongside the emergence of new providers and innovative products which help consumers and SMEs to budget and save in smarter and more effective ways.” King added: “While significant progress has been made, there is still more to do to optimise the full benefits of open banking within retail banking markets, and beyond. We are working closely with industry, government, and regulators on the next phase of open banking to build on this success and expand the wide range of benefits available to consumers and SMEs.” Euan Ballantyne, Head of Product, Pay.UK, said: “2022 saw significant growth in the number of open banking transactions processed over the Faster Payments System. The high percentage of growth rates highlight that we can expect ‘Pay by bank’ and variable recurring payments for sweeping to be a significant source of immediate payments as we look ahead to the rest of 2023 and beyond.” Ballantyne continued: “The JROC review, and our collective desire to create an alternative to card payments, has helped bring Pay.UK and OBL closer together. We look forward to continuing this work to deliver benefits for the wider industry.” Read the report For more information, or to organise an interview, please contact Samantha Boyle at Atticus Partners on openbanking@atticuscomms.com About the June 2023 Impact Report OBL estimates that 11-12% of digitally-enabled consumers and small businesses used open banking during June 2022. This figure has increased from 10-11% in December 2022. A record 9.7m payments were made in June 2023, an increase of 88% on the same month in 2022. There were 3.8m consumers and businesses making an open banking payment in June 2023, suggesting that the average user made 2.6 payments that month. Payments are driving overall usage of open banking, with June 2023 representing the highest penetration ever at 5.9%. Based on existing trends, OBL expects payment penetration to overtake data penetration. As of June 2023, there were 151 fully regulated firms with live-to-market open banking-enabled products and services. New open banking service providers are increasingly using the services of regulated TPPs, rather than become regulated. This is a dynamic market with companies launching services to test the commercial viability of embryonic propositions – 38 new propositions came to market in the first half of 2023. There are a significant number of services in three areas: financial decision-making, payments and borrowing, which account for 75% of all propositions. Consumer growth is slightly higher than business, but business penetration remains significantly higher at 17% (or 1 in 6,) compared to 11% (or 1 in 9) for consumers. For consumers, payments have become the growth driver in adoption. Since OBL published the last report using data up to December 2022, there has been a 10% growth in retail users and a 5% growth in business users. Looking at growth year on year (June 2023 vs June 2022), the growth is 21% for consumers and 11% for businesses. You may be interested in Report New Impact Report sees significant growth in open banking payments and increased business use 30 Mar 2023 Read more Report Open Banking Impact Report June 2022 – key insights on adoption and business use 22 Jun 2022 Read more Report The Open Banking Impact Report (Oct 2021) 03 Nov 2021 Read more
You may be interested in Report New Impact Report sees significant growth in open banking payments and increased business use 30 Mar 2023 Read more Report Open Banking Impact Report June 2022 – key insights on adoption and business use 22 Jun 2022 Read more Report The Open Banking Impact Report (Oct 2021) 03 Nov 2021 Read more
Report New Impact Report sees significant growth in open banking payments and increased business use 30 Mar 2023 Read more
Report Open Banking Impact Report June 2022 – key insights on adoption and business use 22 Jun 2022 Read more
Open banking is delivering significant benefits to small businesses One-in-ten digitally enabled consumers now using open banking Consumer adoption of open banking enabled tools beginning to catch up with SMEs The Open Banking Implementation Entity (OBIE) has today published its latest Open Banking Impact Report showing continued growth of open banking enabled services across the UK. The bi-annual report assesses the progress of open banking adoption in the UK and its impact on both consumers and small businesses. The latest figures show that there are more than six million regular users of open banking enabled services in the UK. Focus on cloud accounting: A new element of research undertaken in this third report focuses on how small businesses are utilising cloud accounting. Cloud accounting allows any business to manage basic accounting tasks including managing cashflow or issuing invoices through cloud-based software. Open banking plays a key role as it gives companies the ability to connect their bank account to their chosen accounting service. Although cloud accounting services pre-date open banking, it is notable that 75% of users started using the service no more than three years ago, with 36% having adopted it within the past year. Open banking started to be incorporated into cloud accounting from April 2019, as one of the earliest propositions. 11% of respondents claim they would stop using their cloud accounting package and 50% would look for an alternative if they lost the ability to incorporate real-time transactions. Open banking is clearly a valued feature among adopters. As part of the research, OBIE segmented businesses based on the number of employees to understand the penetration of cloud accounting services. While the research is not representative of the broader UK SME population, it did interestingly pick up the difference among respondents, where among sole traders just over one-fifth (22%) use cloud accounting services compared to almost four-fifths (78%) for those with 5-9 employees. The data very clearly demonstrates that small businesses find that cloud accounting is playing a key role in giving insights into business performance and making small businesses more efficient and profitable. Key findings include: Given pressures on cashflow, 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. accounting led to small businesses feeling more efficient, with 84% agreeing. 70% saw benefits in the management of late payments, a key issue which many small businesses find hard to track. Some small businesses suggest that cloud accounting services are saving them money: 59% said it had delivered internal savings and 64% external cost savings. 44% of all small businesses reported that their use of the accounting software means that they longer need external accountancy support. More widely across the open banking ecosystem, the key headlines include: OBIE estimate that 10 – 11% of digitally-enabled consumers and small businesses used open banking during March 2022. This figure has increased from 6 – 7% in March 2021 Business penetration (11%) is slightly higher than consumer use (10%), but the gap between the two has closed significantly since 2021. Many small businesses were early adopters of open banking technology, particularly cloud accounting, but consumer offerings are now catching up. In the six months to March 2022, there were 21.1m open banking payments, compared to 6.1m in the same period the prior year. Month-on-month growth is running at around 10%. The fully regulated market remains dominated by propositions addressing improved financial decision-making (36%), expanded payments choice (21%) and better borrowing (18%). However, with the implementation of variable recurring payments (VRPs) for sweeping later in 2022, it is hoped it will encourage the growth of more savings services using open banking. Looking at the products available on the market, the data shows that most providers are targeting consumers (43%), whereas 29% focus exclusively on small businesses only consumers, while 25% provide for both. Charlotte Crosswell, Chair and Trustee, Open Banking Implementation Entity (OBIE): “Charlotte Crosswell OBE, Chair and Trustee, Open Banking Implementation Entity (OBIE): “Our role at OBIE is to make sure we create an open banking system that is safe, secure and easy for consumers and businesses to use. The Impact Report helps inform us and the industry about the evolution of the products and how it is being used. “I am really pleased to see continued growth of open banking products across consumers and SMEs. From allowing people to get their mortgage approved more quickly to paying HMRC, utility bills or charitable donations, the products available continue to grow and are becoming more visible. “Cloud accounting software has been around for a few years, but it’s interesting to see the positive feedback from businesses, small and large. Open banking is making the service more effective and helping businesses keep on top of admin and managing cashflow. There’s certainly more work to be done to encourage sole traders and smaller businesses to adopt it, but it is encouraging to see the value it is adding.” Read the full report here. ENDS Notes to editors: 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 (Competition and Markets Authority) 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
The Open Banking Implementation Entity (OBIE) has today published its second bi-annual report assessing the impact of open banking on consumers and SMEs. The work relates to an ongoing commitment to track the impact of open banking for years to come. According to the new data, adoption of open banking services continues to grow with 8% of digitally enabled consumers estimated to be regular users of at least one open banking service. This has grown from 5.5% in December 2020. One area that is particularly strong is open banking payments. Between February and August 2021, there were 11 million payments, compared to 700,000 in the whole of 2020. Recently, HMRC announced it had received more than £1bn in open banking payments, less than six months after launching. Importantly, if open banking apps and products are to grow in popularity then it’s key that they are easy to use, inclusive and help the customer achieve their financial goal. The data shows over three-quarters (76%) of people saying they will or are likely to continue using the services and 90% reporting they are easy to use and set up. 83% of respondents indicated that they would be interested in expanding their use of open banking-enabled services. Encouragingly, the findings indicate that growing adoption of open banking services is improving the financial health of the UK. When looking at money management apps and tools specifically, the research has for the first time been able to understand the extent to which customers are seeing positive outcomes in terms of their financial health: Customers using these apps and tools said that they were helping them to keep on top of expenditure (75%) and keep to a budget (64%), reduce unnecessary expenditure (62%), shop around more (59%) and reduce fees and costs (55%). When looking at savings apps we saw strong evidence that these services were helping people with their savings, even if some had only recently started using the app: We also found that 64% claimed the apps had increased their total level of savings. Of the respondents who claimed their savings had increased: 37% of these customers said they were concerned about their level of savings, suggesting these apps seem to be encouraging consumers who have had historic problems savings start to put aside some money. We also explored whether the use of open banking saving propositions was encouraging individuals who had never previously saved. Over a fifth (22%) of respondents said this was their first adult saving account. While predictably a higher proportion of respondents aged 45 and over had previously had a savings account, even in this age category use of the app had encouraged new savings behaviour (16%). A quarter of those aged under 45 had never previously saved. It is estimated that half of the UK’s open banking users are aged 25 to 44, and that many early adopters of open banking enabled services are typically less experienced and have lower financial confidence. Charlotte Crosswell OBE, Chair and Trustee of the Open Banking Implementation Entity (OBIE) commented: “I’m really pleased the Open Banking Impact Report points to a continued growth in open banking services. The focus in the past few years has been building the infrastructure completely from scratch. We’re now beginning to see exciting new providers and products emerge with an even stronger pipeline. It’s great to see continued adoption from consumers and SMEs, but importantly seeing that these tools are solving real world issues such as saving and budgeting. That’s really important to me and the best is very much yet to come.” You can download the report here. 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 study sample Marketing Means (UK) Ltd conducted 4,014 online interviews using a consumer panel to draw a broadly representative UK-wide sample of adults aged 16+. All fieldwork was conducted between 25th August and 14th September 2021. In addition, one of the third party providers offering an open banking app also agreed to share the online survey invitation with a sample of their customers. This fieldwork was conducted between 9th and 25th September 2021, and added a further 152 interviews. – – – ENDS – – – For further information, please contact: press@openbanking.org.uk About us 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.The OBIE is governed by the CMA and funded by the CMA 9 (Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, Natwest Group and Santander). Its works with the CMA 9, as well as challenger banks, financial technology companies, third party providers and consumer groups. The OBIE’s role is to: Enforce the obligations on the CMA 9 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 OBIE’s Open Banking Standards Create security and messaging standards Manage the OBIE’s 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
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: 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