Category: Topical

As cost-of-living pressures mount and households feel the pinch, it’s more important than ever to identify ways to save money. The open banking revolution is making it easier, faster and smarter to save. With 34% of adults either having no savings, or less than £1000, in a savings account – open banking is finding ways to innovate and help mitigate mounting living costs.

In previous research, OBL found that 64% of consumers claimed that using open banking savings apps increased their total level of savings and helped them to develop a regular savings habit. With 11% of UK consumers and 17% of small businesses now using open banking, the UK is increasingly embracing this financial innovation to help boost their savings. It allows people to put money aside quickly and easily, either by using ‘round-ups’ on regular purchases, or apps that sweep surplus cash from current accounts to interest-earning saving accounts.

Open banking-powered investment apps have also brought wealth management services to a wider audience, by combining low fees with a low barrier to entry. With an up-to-date picture of an individual’s finances, these apps can deliver better deals, and more relevant products and services.

Open banking is also helping to boost savings by allowing consumers to open a savings account and deposit straight away, allowing them to start earning interest more quickly. This is in contrast to the several days it can traditionally take for deposits to reach an account.

Consumers want ease and convenience when managing their savings, which is why there is also increased demand for Variable Recurring Payments (VRPs) – a ‘smart payment’ that allows controlled sweeping between current and savings accounts, helping both consumers and businesses to save smarter.

One building society has recently partnered with an open banking platform to enable members to fund their savings account immediately after they’ve opened it. The building society estimates that about 8 per cent of accounts are closed each month as members forget to fund their accounts. This faster funding puts users on a good footing to start saving smarter from day one.

As the UK swiftly moves towards ‘open everything’, the many additional benefits and cost saving options open banking can provide will become even more apparent. Open finance has the ability to create innovative products, allowing consumers to maximise the interest they earn by keeping savings in situ. They can move the money to a current account when needed for regular payments such as mortgage, rent or other bills.

Henk Van Hulle, CEO, Open Banking Limited, said: “As we mark World Savings Day, we are proud of the benefits open banking providers offer to consumers, allowing them to save smarter and faster. Enabling the UK population to increase their financial resilience is a key driver of open banking.”

He added: “As we look beyond open banking, it is important that the Government proceeds at pace with the Digital Data Protection and Digital Information Bill which will fully unlock a revolution of smart data to other sectors such as energy, telecoms, and water.”

The Open Banking Limited team were in Liverpool this week at Labour Party Conference, where the overarching themes of the economy and the country’s finances, as well as bringing about growth across the UK, were the focus. The transformational role of tech in powering the UK took centre stage several times throughout the conference, with a recognition that Labour’s five missions are all underpinned by digital innovation.

Shadow Chancellor Rt Hon Rachel Reeves MP outlined that the economic mission will pave the way for the other four missions. In her keynote speech, she outlined the need to increase investment and the building of infrastructure around the country to bring about growth. In later events, she stated the need for increased investment and innovation in the UK, recognising that businesses often seek capital in other countries due to the limited access to financing domestically.

Open banking as an engine of the digital economy was the focus of our panel event, which we held in partnership with NatWest Group and TrueLayer. Chair and Trustee Marion King began the discussion by highlighting the growth of open banking before highlighting the importance of equal access and fairness for all stakeholders.

Marion then outlined the challenges of scaling within the UK, noting the desirability to look beyond the country’s borders before opening the discussion to the rest of the panel – Mo Mizra from TrueLayer, Stephen Wright from NatWest Group, Peter Dowd MP and Lord McNicol, Vice Chairs of the Fair Business Banking All-Party Parliamentary Group, and Virendra Sharma MP. Other parliamentarians in attendance included Shadow Minister for Crime Reduction Naz Shah MP and Member of the Treasury Select Committee Siobhain McDonagh MP.

Opportunity for growth in other areas driven by open banking

The discussion then turned to the practical roles open banking can play in society, including in reducing fraud, the significance of open banking for small and medium enterprises (SMEs), big tech’s entry into the UK’s open banking ecosystem, and the opportunity for growth in other areas stemming from open banking – such as the improvement of environmental, social, and governance (ESG) delivery.

Stephen Wright from NatWest Group summarised by discussing the high-level benefits of open banking, emphasising its role in providing consumers with choice, saving time, and fostering innovation within the financial sector.

It was noted that the true value of open banking can be seen through the experiences and advantages it delivers to individuals and businesses. Overall, it was another successful panel discussing the benefits of open banking and the advantages it can bring to consumers and businesses in the UK.

Later that day, Marion attended a private roundtable with the Startup Coalition, hosted by Lord McNicol. This served as a useful opportunity to update smaller fintech firms on open banking progress, as well as hear from them about the challenges they’re facing – now and in the future. Separately to the organised events, OBL representatives caught up with Shadow Business Secretary Jonathan Reynolds MP, Shadow Chancellor Rachel Reeves, Shadow Energy Secretary Ed Miliband MP, Shadow Paymaster General Jonathan Ashworth MP, Lord Mandelson and others.

This week’s Labour Party Conference sought to showcase a vision for increased and sustained economic growth across the UK. Just as in Manchester, we spoke to stakeholders on working together to increasingly inform both industry and consumers on the benefits of open banking, and how we can continue to revolutionise the UK’s financial landscape through open banking. We look forward to working closely with both parties in the run-up to the General Election next year.

This year’s Conservative Party Conference offered a focused snapshot of the prevailing trends and challenges in the UK’s financial services sector. Several overarching themes emerged, highlighting the sector’s complex landscape and future opportunities. Topics such as innovation, regulation, and risk management were central to the discourse, suggesting a collaborative approach between government, industry, and regulators to cement the UK’s role as a global leader in financial services. 

We were on the ground in Manchester, holding one-to-one meetings with Chris Hayward, Policy Chair of the City of London Corporation, and John Penrose MP. We also attended the launch of the Payments Association’s manifesto with Sir Graham Brady, and hosted our own panel event and private lunch.  

Our panel event aimed to highlight the growth of open banking and demonstrate the benefits it can bring to both consumers and businesses. Chair and Trustee Marion King started her remarks by revealing impressive statistics, including the 12 million monthly transactions facilitated by open banking. She also commented on the challenges of sustaining open banking and that there must be a viable funding model to support its growth. She also discussed the importance of a financial structure that benefits all players involved, from fintech start-ups to established financial institutions, and suggested that such a balanced approach is essential for the continued success and scaling of open banking. 

Other panellists included Minister for Tech and the Digital Economy, Paul Scully MP, Head of Regulation and Standards at NatWest Group, Stephen Wright, and CEO and Co-Founder of TrueLayer, Francesco Simoneschi, who all discussed the many benefits of open banking including simplifying financial experiences and assisting small businesses with cash flow management.

Minister Scully noted the transformative potential of open banking, with 7.75 million users already benefiting in the UK. He also made it clear that while the UK is a leader in this space, complacency could be detrimental.  

Similar themes were discussed during the private lunch OBL hosted during the conference. The lunch event provided the opportunity for experts and supporters of open banking opportunities to discuss how the UK can be positioned as world leading when it comes to not only open banking, but also open data. Paul Scully MP, and Parliamentary Under Secretary of State in the Department for Energy and Net Zero, Andrew Bowie MP, were both in attendance and were effusive about how the sector can ensure that consumers are put first and the steps to take to ensure that this is the case. There was also concern voiced around how the UK can make sure that, despite global commercial business flows, a UK leading standard is adopted.  

Overall, the Conservative Party Conference showcased a collaborative ethos among stakeholders, government, private sector, and regulators, all working towards a cohesive vision.

The panels and discussions pointed to a collective ambition: cementing the UK’s role as a global leader in financial services and related technologies.

The OBL team will be attending the upcoming Labour Party Conference in Liverpool this weekend and hope to have similar conversations with experts and politicians alike.  

Notes from panel event: Open banking: the catalyst for a UK digital economy