Insight Type: Report

We are pleased to publish Commercial Model for Variable Recurring Payments Wave 1, the public consultation on the Wave 1 cVRP commercial Model report prepared by Frontier Economics for OBL.

Read the
Frontier Economics report here
Download

OBL has also prepared a companion paper that summarises the report’s key findings, and which sets out key questions on the proposal and pricing (see below). You can read OBL’s summary here.

Your opportunity to respond

We are asking for feedback on the following questions. Please submit any written responses before close of business on 16 May 2025 via email or complete the online survey here.

KEY QUESTIONS
Q1: Does the proposal for the commercial model outlined in Frontier’s report adequately fit with the PSR and FCA pricing principles?
Q2: Does the proposal for the commercial model approach, in its current form, provide the best balance of the interests of participants being able to offer/use cVRPs without creating material barriers to inclusion or competition?
Q3: Does the proposed approach lead to proposed prices that allow ASPSPs to recover their expenses?
Q4: Does the proposed approach lead to proposed prices that are proportionate, objective and non-discriminatory?
Q5: Do you agree, or have any material concerns, about the assumptions and conclusions reached within the development of the approach to the proposed commercial model?
Q6: Do you think any of the commercial model price options would drive or prohibit the adoption of cVRPs by ASPSPs, PISPs, consumers, billers, merchants or other recipients under the Wave 1 use cases? Which of the pricing options would drive the right incentives through the value chain, as well as meeting the objective of consumer and business adoption? 
Q7: Do you think any final price should be (a) a fixed multilateral price, (b) a price cap with bilateral negotiation allowed below that cap, or (c) a fall-back price for any situation where bilateral negotiated prices cannot be independently reached?
(Note: Frontier has reserved its position on the legal framework required to ensure compliance with applicable competition law and we are discussing with our legal advisers. If you have views on the most effective approach, please provide them.)  
Complete the online survey here

OBL is pleased to publish Commercial Variable Recurring Payments (cVRP), the public consultation on the cVRP Multilateral Agreement (MLA).

This paper is published alongside the draft documents that together make up the MLA for cVRPs. Here, we explain the background to cVRPs, outline what the MLA is and its purpose, and pose the questions we are seeking responses to in this consultation.

The aim of this consultation is to ensure the MLA documents meet the requirements of the cVRP product and that there are no material errors, deficiencies or other issues in the content of these documents that would otherwise lead to poor delivery or poor customer experiences of cVRPs, which would harm their adoption.

We ask that you look at the MLA documents that are published alongside this document, and provide your feedback. You can download the consultation here.

Download the consultation

Read here

We welcome written responses from the industry by close of business 28 February 2025. You can complete your responses to the consultation using our online survey, or email your response to us.

Multilateral Agreement
Open Banking Limited (OBL) and Pay.UK have been working with different industry Participants to define the policies that determine how cVRPs will operate. This work, alongside the legal drafting prepared by our external legal advisors, Addleshaw Goddard, has produced the series of documents comprising the MLA on which we are now consulting.

The MLA is made up of a Participation Agreement, a Rulebook, and Schedules to those rules. After these have been agreed, we anticipate a series of operational guides will be produced to aid industry participants.

The Participation Agreement is the contract which Participants will need to enter into in order to take part in the cVRP system. It sets out a contractual relationship between the Operator and each individual Participant. Participants can either be PISPs, or ASPSPs. It also allows for Participants to act in both roles.

The Rulebook is the detailed set of rules that all Participants, and the Operator, need to adhere to.

The premise of cVRPs is that there is a commercial model underpinning the set-up of cVRPs on customer accounts and any payments initiated under those cVRPs. This means PISPs pay ASPSPs for access to those APIs.

The commercial model remains in development and is not included in the MLA at this time. It is envisaged that the commercial model will be added to the MLA separately after this consultation has concluded.

Consultation questions
We are asking for feedback on the MLA documents. These are published alongside this document.
Key questions that we are seeking input on, and feedback from you:

  1. Do you agree that the MLA enhances and fosters inclusion and increased competition? Please provide reasons for your answer.
  2. Do you agree that the MLA provides flexibility to foster different market Participants being able to offer / use cVRPs? Please provide reasons for your answer.
  3. Do you agree the MLA provides the Operator with adequate tools to manage Participant compliance? Please provide reasons for your answer.
  4. Do you agree that the information provided to customers and other elements of the cVRP design provides adequate protections to customers? Please provide reasons for your answer.
  5. Do you agree the rules and requirements in the MLA are adequate to ensure a competitive and attractive product for beneficiaries such as billers and merchants? Please provide reasons for your answer.
  6. Do you agree that the key aims of the MLA to build consistency in approach for the benefit of Participants, customers and beneficiaries are achieved? If not, can you provide specific examples where this is not achieved and reasons for your answer.

Please submit any written responses you may have before close on 28 February 2025 via email or our survey. We will consider your comments when preparing our response to this consultation.

We reserve the right to make all non-confidential responses to this consultation available for public inspection.

Confidentiality notice
We will not regard a standard confidentiality statement in an email message as a request for non-disclosure. If you want to claim commercial-in-confidence protection over any specific items in your response or your entire response, you must identify those specific items which you claim to be confidential.

We will not publish any responses which include information marked as confidential, unless we are specifically required to do so by any applicable laws or regulations or by any competent authority. We will consult with you if we receive such a requirement, to the extent not prevented from doing so by any applicable laws or regulations or by any competent authority.

We take our data protection responsibilities seriously and will process any personal data that you provide to us in accordance with the Data Protection Act 2018, and the General Data Protection Regulation, where relevant.

Open Banking Limited (OBL) is pleased to publish the final report for JROC Workstream 2a, Financial Crime within Open Banking journeys, which is the result of extensive consultation with the ecosystem, regulators and relevant industry bodies. 

It is the first time that such a rich dataset and insights have been gathered specifically relating to fraud in open banking, and we want to thank the data providers for their input. 

It is based on six months of data collected from ASPSPs representing nine brands and 60% of the market. In order to baseline the data, we have also looked at UK Finance figures from the UK Finance Half Year Fraud Report 2024. We share some of the highlights below. 

Download the report

JROC Report

You can download the full report here.

Analysis of fraud rate – key headlines show that open banking transactions have a significantly lower fraud rate by volume compared to other payment types, but slightly higher by value. Also, open banking transactions exhibit higher APP fraud rates than other payment methods, which reflects its association with larger transactions, such as account transfers and high-value purchases.  

Similarity with fraud in other payment methods – ASPSPs reported that open banking fraud is similar to fraud seen in other payment methods– fraudsters exploit its payments for sophisticated scams, including investment fraud and impersonation schemes, often using social engineering techniques via social media.  

Continual monitoring – although current levels are low, ASPSPs continue to closely monitor fraud as open banking’s growing adoption is likely to attract fraudsters’ attention.  

Prevention measures – from our discussions with ASPSPs, we highlighted some key measures to help further prevent open banking fraud:  

“We are grateful to all the companies that provided data, and those that have taken the time to speak to us about fraud. This is a great base to build upon and enables us to continue to bring the ecosystem together to collaborate on the prevention of open banking fraud, particularly as the use of open banking expands. 

It is also reassuring to note that the ecosystem is unified in the interests of preventing fraud, and the effects of fraud on individuals, society and the UK’s economic health. OBL is committed to the prevention of fraud and is keen to play its part in doing so where possible.”

Christian Delesalle, OBL Head of Participant Support

The Centre For Innovation and Technology (CFIT) and Open Banking Limited (OBL) recently published their report, Smart Data: improving SME lending to drive economic growth. The report, based on findings from the SME Finance Taskforce, highlighted how leveraging smart data could support business growth for the UK’s sole traders and SMEs.

Based on CFIT’s 2023 blueprint, which demonstrated how utilising public and private datasets could unlock decision-making on SME lending, the report is a timely reminder of the impact of reduced lending to the UK’s 5.5 million small businesses which face an estimated funding gap of more than £22bn.

The report sets out a comprehensive programme to help energise the UK economy by improving the lending process and experience for both SMEs and lenders.

This plan has the potential to support wider growth that could see more people employed by SMEs, rising SME GDP, and increased tax revenues from small and medium-sized businesses supporting further growth. It’s also why it’s important that the government passes the proposed smart data legislation promptly – it can support investment and help secure future economic success.

Importantly, it only requires limited public spending.

Short-term action plan
The taskforce, drawn from an industry-wide coalition of 40 banks, alternative lenders, and trade associations, proposed a 7-point action plan to unlock SME finance using smart data:

  1. Prioritise the Digital Information and Smart Data Bill
  2. Fund and support an SME “Smart Data Challenge”
  3. Review and improve HM Treasury’s Bank Referral and Commercial Credit Data Sharing (CCDS) schemes
  4. Accelerate reform of Companies House, in particular standardisation and verification of Company information such as directors’ names
  5. Unlock private sector data by providing information from HMRC e.g. digital receipt of VAT owed to match and verify cloud accounting data. In addition, allow greater access to HMRC data for approved organisations
  6. Develop and consult on proposals for an e-invoicing scheme for the UK to align with overseas markets
  7. Enable greater trust in using new specialist lenders e.g., through industry initiatives.

Promptly implementing the above action points could have a positive effect and unlock finance for small businesses. Existing data sources – public and private – can be expanded and verified. Business owners will save valuable time on preparing paperwork for lenders. Lenders, meanwhile, will have access to more, and more relevant, data, and can feel confident in its validity, helping to speed up, or even automate, the decision-making process.

Changes in loan appetite from some banks
It’s important to understand that business lending has stalled, not because of increased risk, but because many traditional lenders have moved into wholesale lending. Corporate lending is now largely provided by new specialist banks and lenders.

However, many businesses and sole traders are not aware of alternative ways for them to access finance, and, if they are declined, often fail to look elsewhere. Those new, alternative, lenders do not necessarily understand how that business operates, so are not always able to quickly access the information they need to understand risk, and to offer competitively priced loans.

Verifying data can help tackle fraud
Having verified and accurate data can also highlight fraudulent loan applications. Fake businesses or firms that deliberately submit misinformation in their applications cause financial losses and administrative problems for all banks and lenders. Smart data can help remedy this and provide more certainty to lenders about the organisations applying to them for loans.

Introducing a scheme or rulebook
Integral to the success of the taskforce’s action plan is better, more open access to data and ensuring that data is verifiable and reliable.

While the report makes specific recommendations that can be individually progressed, the bigger picture requires an entity to act as the catalyst to bring the various initiatives together. This includes providing the trust framework that sets the standards and data quality requirements, as well as enabling access to that data. This entity would play a similar role to that of OBL in the implementation of open banking.

Expanding access to business borrowing is just one of the use cases that smart data can help enable. The entity that operates SME finance standards can scale, and its rules and standards can apply to other sectors, such as utilities, insurance, travel, and logistics to name but a few. SME finance could be the first test case leading to an efficient, cost-effective and flourishing smart data ecosystem.

Nick Davey, OBL Senior Strategy and Policy Lead, and Secretary to the Taskforce

What comes next?
The government and others will need to decide what entity or entities are best placed to take this work forward. But let’s not get ahead of ourselves. Before any existing or future organisation can start work, several important building blocks need to be in place.

As the action plan highlights, swift passage of the Digital Information and Smart Data (DISD) Bill is essential, and OBL is continuing to engage with government, policymakers, parliamentarians and other key stakeholders to support this.

Standardising data and the supply chain
We also need to understand the nature of the public sector and private data that is useful to both SMEs and lenders, and how to standardise it. We also need to understand how the different parties in the data supply chain could act and how to set out the rules and contracts to deliver this. We also need to understand how centralised consent can work to unlock multiple data sources easily and efficiently for SMEs and lenders.

These are all possible and very credible things that can be done, and need to be done, if we are ever going to get real world smart data solutions off the ground.

Read the report

OBL welcomes the Joint Regulatory Oversight Committee’s (JROC) recommendations on the design of the Future Entity and the creation of the Interim Entity.

We fully support the commitment to establishing a Future Entity that will be central to:

(a) delivering a well-functioning, commercially viable and sustainable open banking ecosystem

(b) building on the foundations of what has been achieved under the CMA Order, and,

(c) ensuring the UK’s continued leadership in open banking. 

This will provide the means for transitioning ongoing Order-related requirements to a long-term framework and the future success of open banking.

All open banking activities, whether they be Order or non-Order related, share a common vision and purpose, namely to deliver enhancements for the benefit of the wider ecosystem, including consumers and businesses, together with the UK economy as a whole.

We believe that ensuring this commonality of vision is key to effective attainment of these desired outcomes and facilitates the delivery of them. This is a key principle that must underpin the evolution of open banking. It is also critical to ensure that the delivery approach is as cost-efficient and cohesive as possible.

The direction that is set out in the report will provide the right foundations to take forward open banking and allow expansion of both the Interim Entity and Future Entity’s remit to develop Smart Data in other sectors and to drive the development of account-to-account retail transactions to offer consumers and businesses an attractive alternative to card payments.

This aligns with the PSR’s objective to support the development of account-to-account retail transactions and the FCA’s objective to have a variety of safe payment methods. This can only be a good thing for the future of open banking and Smart Data more broadly.

You can read the response in more detail here.

Read OBL’s response to the JROC report

Open Banking Limited (OBL) has today published its latest Open Banking Impact Report showing for the first time how open banking-enabled products are being used by over seven million consumers and small businesses.

There are around 750,000 small to medium-sized enterprises (SMEs) using open banking products. Despite more products being available to consumers, adoption by businesses is higher than consumers with a 16% penetration rate versus 11%. The latest data shows the gap between the two is widening and is largely down to more small businesses using cloud accounting software that uses open banking to import transaction data.

There is a clear difference in consumer and SME use of open banking too. Small business use is dominated by data-driven account information services (AIS) which allow firms to see multiple accounts in one place, providing valuable real-time insights for cash flow and forecasting. This accounts for 79% of business use.

In contrast, this falls to 52% among consumers, who may use these services for money management tools, for example, to help them budget. However, consumers are using more payment initiation services (PIS), which allow them to move money, for example, to top up wallets, or to pay tax or credit card bills.

Other key insights include:

Marion King, Chair and Trustee, OBL, said: “It is encouraging to see a continued and steady increase in the adoption of open banking products and services, particularly by the UK’s small firms which are seeing tangible benefits from real-time business insights offered by open banking data.

“It is also exciting to see the expansion of services in key areas such as borrowing and financial decision-making, empowering people to make better informed choices about managing their money, which is crucial as we face an increased cost of living.”

In our latest Open Banking Impact Report, we share unique new research into how small businesses are utilising open banking-driven cloud accounting services.

We set out to understand how these services are changing the way in which the UK’s small firms manage their business and whether this is leading to improved efficiencies, insights, and cost savings as a result.

Business attitudes to open banking-enabled services
We believe this is the first time any quantitative research has sought to understand small business attitudes to these open banking-enabled services, which is possible for the first time given the growth in adoption.

Our independent research agency interviewed 904 users of cloud accounting packages to understand in detail their day-to-day experience of this software. More specifically, we wanted to explore the role that open banking has played in the adoption of cloud accounting.

We’re pleased to reveal that there are some very positive outcomes, which show that these services are delivering considerable benefits to the small businesses that adopt them. For full details of our research, view the June 2022 Impact Report here.

Open banking has become a critical component of cloud accounting
Although cloud accounting services pre-date open banking, it’s helpful to note that 75% of users started using the software less than three years ago, with 36% having adopted it within the past year.

More significantly, 72% of respondents cited the ability to connect to a bank account as an important feature of their service, and 58% regarded the availability of real-time transactions – an integral part of open banking connections – as important.

Snapshot of financial position
We know that many small businesses find it hard to accurately understand their current financial position. An overwhelming majority (77%) of respondents reported that they now have better visibility of their financial position at any given time as a result of using these services.

Cloud accounting users are positive about the service
Small businesses of all sizes have positive experiences of using cloud accounting software, with 87% of respondents indicating that they will continue to use the service.

And although cloud accounting represents an additional cost for many tightly-squeezed small businesses, a large majority (79%) also believe the service offered good value for money.

Users find it easier to interact with their accountants
As trusted advisers, the recommendation of their accountants plays a key role in small businesses adopting cloud accounting, and 73% of the firms we surveyed agreed that using this software made it easier to collaborate with their accountant.

These results are even more marked when looking at larger and more complex businesses – 76% of businesses with five to nine employees agreed with this statement, as do 78% of businesses with a turnover exceeding £500k.

Supporting efficiencies and profitability
It’s clear that using cloud accounting software has helped small businesses feel more efficient and 84% of the firms we spoke to agreed with this statement.
When we explore these efficiencies in more detail, we can see more specific benefits.

These are important ways to help businesses feel more productive and profitable – a key aim of the 2021 Kalifa Review.

“Intuit QuickBooks welcomes the OBIE’s Third Impact Report exploring the role of accounting software in the UK. Open banking is super-charging real-time cloud accounting which supports small business cash flow planning, streamlining business administration and helping them get paid quicker." Rob Burlison, Director of Corporate Affairs, Intuit

Rob Burlison, Director of Corporate Affairs, Global at Intuit, makers of small business accounting platform QuickBooks, said: “Intuit QuickBooks welcomes the OBIE’s Third Impact Report exploring the role of accounting software in the UK.

“Open banking is super-charging real-time cloud accounting which supports small business cash flow planning, streamlining business administration and helping them get paid quicker.

“The success of open banking in the UK merits consideration from governments around the world as they decide how best to roll out their own versions of open banking.”

Recent research from the Federation of Small Businesses found that 72% of small businesses struggle to accurately forecast their earnings for the year, suggesting that these new insights are particularly valuable.

The ability to calculate tax and VAT, to share information with their accountant and the availability of real-time transaction data were also rated as valuable features of the software by our respondents.

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:

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:

As part of our latest Impact Report, we conducted additional research from independent research agency Marketing Means. In it, we interviewed a small number of UK consumers, from a wide range of age groups and income brackets, who shared their experience of the market-leading savings apps.

How can apps help the saving habit?

Open banking savings apps offer a handy, ‘low impact’ way of helping individuals to save.

This works in two ways: providing an additional means of saving for more established savers, or in some cases, provide a way of saving to individuals who have otherwise struggled to do so.

Most of the savers we spoke to thought that their ability to save effectively was enhanced by using these apps, and they expected to continue to use them.

They typically appreciated the way in which their app could enable regular saving for them in the background and found it convenient and enjoyable. Particularly when it brought them an unexpected boost in savings – however small.

The idea is that these features help consumers to save without having to think about it, enabling them to gradually build up their savings.

Many consumers said they enjoyed trying out these new ways of saving and that there was some fun and enjoyment in the process.

While they understood that it might take some time to see a significant difference in their overall level of savings, several of those customers interviewed felt that using the app had helped them build a sustainable savings habit.

Several customers felt that using the app had helped them build a sustainable savings habit

Seeing savings build up

Nearly two-thirds of users reported that their overall level of savings had gone up since they started using a savings app.

However, a further 20% said that they had not been using the app long enough to tell, (not unexpected since nearly one third had only used the app for less than three months) with only 13% indicating that their savings had not increased.

Here’s what the interviewees said about how using an app had impacted their savings habits.  

Q. What are the positive aspects of using your savings app?

A. “I really like the saving round-up feature. I’d say overall they’ve met my expectations and exceeded them. And using it, I’ve matured as a saver.”

A. “It’s all very easy. How much goes in varies, as it runs itself in the background, but I really like the way I can slow down or speed up the savings rate through the app. It really gives me confidence that if I’m having a heavy week, I can adjust it.”

A. “I save through two apps. One has a fairly standard account but there are some issues with getting money out of that one. I’ve had some delays on withdrawals, so I tend just to leave the money in there. On the other app, I’m more engaged as I’ve got money going into two funds. One is a standard one but the other one has a higher risk rating. I enjoy doing that one. It’s satisfying seeing what happens with it, and fun as well.”

A. “The advantage was, I didn’t want to replace my bank account, so I didn’t want to go down a Monzo route. I wanted an additional savings facility that would link to different accounts I have.”

Q. Was the app easy to use and did it help you understand your finances better?

A.”I really like how the app slows me down. Because it’s a restricted access, I can’t just dip into it as I have done in the past with others. But also, that makes me reflect and means I can think about my money more. It’s changed the way I am with money, for the better.”

A. “I like the flexibility. You can dial the savings rate up and down. You can boost a payday. I can use it flexibly to save when I’ve had a bonus. And I like the way they describe the investment plans – ‘standard’, ‘balanced’ – I think that’s a useful way to explain them, easy to understand. The app has a really good dashboard, it almost feels as if you’re getting a bespoke savings service that’s easy to use.”

A. ” I was attracted by the way it saves in the background, so you hardly notice it’s happening. When I started, I thought I’d build up a substantial fund really quickly. I’ve got a more realistic view now, but I’m still really happy with it.”

Q. Will you continue to use and expand your use of open banking services in the long-term?

A. ” Yes, I definitely feel more engaged with the saving I’m doing because of using the app. I do like to watch it grow, and I check it most days during the week. I’m now thinking about what more I can do. For example, I’m now interested in looking at my pension. Also, I think I’ll consider looking at the investment side of things and crowdfunding.”

I definitely feel more engaged with the saving I’m doing because of using the app. I like to watch it grow, and I check it most days.

A. “I think I will try the investments through the app. I’ve done crypto trading in the past and that was fun, but this looks different, more mature and longer term. Yes, I would do it through the app as they seem very focused on saving.”

A. “I have been saving for holiday in Bali. But once that’s out of the way, I think I’ll move onto stocks and shares. So, this is another way to save. My ISA is maxed out and I see that investment charges through the app are lower than on my investment platform.”

Watch our short video to see how savings apps work.

You can read the full report here.

Notes:

A total of 4,014 consumers took part in the survey between 25th August and 14th September 2021, of whom 464 claimed to have used any of the nine Third Party Provider (TPP) apps and gave the correct description of its purpose, and went on to form the core sample for this piece of research.

The survey fieldwork approach consisted of two elements. The first and largest was the use of an online consumer panel run by a UK-based provider, which offered an excellent way of contacting a large and broadly representative sample of the UK general public aged 16+, drawn from 450,000 UK panellists. You find out more about the methodology in the full report.

As part of our latest Impact Report we conducted additional research from independent research agency Marketing Means. In it, we interviewed a small number of UK consumers, from a range of age groups and income brackets, who shared their experience of using some of the market-leading open banking apps to help them manage and control their personal finances.

For some people, their money management app has proved to be a revelation, giving them a clear and categorised view of their spending over time that is easy to comprehend and action – unlike most bank statements.

Improved money management

They reported that this has improved their understanding of their financial position and helped them feel more in control of their finances. In turn, this has engendered a higher level of confidence in managing their money and financial decision-making.

Some interviewees indicated that this was motivating them to engage more with their finances and manage them more effectively. This is encouraging given that one of the CMA’s stated aims of open banking was to empower customers to engage more effectively with financial and banking services.

Identifying wasteful spending

They also appreciated – and trust – the information they receive about their spending, as well as for most individuals, the pointers to where they can cut wasteful expenditure or find better deals, particularly around product renewals and subscriptions.

Other people reported the benefit of having an enhanced overview of their finances – perhaps using their app to see across multiple current and savings accounts. While these individuals generally had a good understanding of their financial situation, they were looking for a quicker and easier way to see their overall position.

We share some of their insights and observations.

Two houses, all my outgoings, credit cards, and utilities – it lets me see what’s coming up.

Q. What are the best aspects of using a personal financial management (PFM) app that you’ve experienced?

A. “Another good thing is the way it gives me suggestions on where to save money, for example when I’ve wound up having streaming services that duplicate each other. And pointing that out to me, in a really useful way, how much I could save. And I can pin the suggestions, so I can come back to them later.”

A. “The prime benefit is efficiency – cutting down on time and the process required to see all my accounts, and to be able to view and access them in one place.”

A. “It takes away the donkey work of finding new deals. And I always feel in control – they put the offer in front of you, but you decide.”

Q. Was the app easy to use and did it help you understand your finances better?

A.”I really can see my money so much more, through the way it puts it into categories. I’m managing two houses now that my mum’s moved in with me. Being able to see all the expenses in categories allows me to have more control and cuts down on the mistakes I was making before.”

A. “Yes, I’m going completely app-based as much as I can, because online banking through the browser really has become so inconvenient. It really is undermined by so much laborious security.”

A. “It did confirm that we’ve been spending a lot on groceries – £10,000 on Ocado. We used to buy these pizza kits, they’re really nice but at £16 a kit, it soon adds up. We used to order things because we wanted to see what they were like. We’re cutting down on that now. But I think we cut down because of the hit on our income from lockdown, I wouldn’t say it was because of the app. Maybe because I can see it a bit clearer.”

A. “I’m more likely to look at switching deals through the app than on price comparison websites, when it comes to renew. Because the app is more active in sending me suggestions, it will get my attention more.”

I’m more likely to look at switching deals through the app than on comparison websites when it comes to renew.

Q. Will you continue to use and expand your use of open banking services in the long-term?

A. “When I’m out of contract, I will certainly do something about my mobile contract. And I’m not really someone who has switched a lot before, it can be too much bother. But it is encouraging me by showing me what the jump is going to be when I go out of contract. The difference to something like USwitch, when they show me savings it feels more theoretical, will I really make that saving? Whereas the app really does know my spending, so I can trust what it says about how much I’ll save.”

Q. Did the app help you manage your finances?

A. “Two houses, all my outgoings, credit cards, and utilities. It lets me see what’s coming up. I’m now better at managing it all, my old spreadsheets couldn’t cope. Previously I did miss things and then wound up paying overdraft charges.”

A. “Because I can see my money easier and have more control, I feel encouraged to increase my saving, to put more money away.”

Q. Has the app helped improve your financial wellbeing?

A. “That I can get all my accounts in one place, that I can see my spending in categories, that I can assign categories myself, that I can see my spending over time – that is all really motivating me to make my situation better.”

A. “I feel more assured. Because I can see my spending so much easier this way, it feels as though I’m more protected against fraud on my account, because I would see it easily and quickly.”

A. “The app is really relevant to me now, as I’ve gone back to being a student, so with a limited income I have to watch my spending.”

You can read the full report here.

Notes

A total of 4,014 consumers took part in the survey between 25th August and 14th September 2021, of whom 464 claimed to have used any of the nine Third Party Provider (TPP) apps and gave the correct description of its purpose, and went on to form the core sample for this piece of research.

The survey fieldwork approach consisted of two elements. The first and largest was the use of an online consumer panel run by a UK-based provider, which offered an excellent way of contacting a large and broadly representative sample of the UK general public aged 16+, drawn from 450,000 UK panellists. You can find out more about the methodology in the full report.

In our second Impact Report (October 2021) we evaluate the continued expansion of open banking services in the UK and their growing adoption.

We also analyse consumer reaction to open banking services and explore whether they are changing how individuals manage their finances and whether they are seeing long-term benefits to their financial health.

The key insights in this Impact Report are:

About this report

The Open Banking Impact Report is a key tool to help policymakers and others in our ecosystem to understand how open banking is developing and whether it is helping the UK’s consumers and small businesses.

The report is built using a methodology developed by the Personal Finance Research Centre at the University of Bristol. The insights are based on several data sources and research studies which we detail in the methodology sections. We produce a new report every six months.

Read the report.

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.

Read the report.

Building on the insights from our recently published Annual Report, this 2020 round up details some of the achievements and milestones from across the open banking ecosystem.

Created in the interests of transparency – to provide an overview of the OBIE’s activities for 2020 and 2021.

2020 was a transformational year for open banking and for the Open Banking Implementation Entity (OBIE).

Open banking, and the Open Banking Implementation Entity, have come a long way since the Competition and Markets Authority’s retail banking market investigation in 2016.

This report explains who we are and why our role matters; it summarises our work across 2020 and 2021, and it provides an overview of open banking-enabled products and services. We highlight the day-to-day activities at the OBIE, as well as an overview into our governance and financials.

Read the OBIE’s Annual Report today:

The OBIE’s Annual Report – Digital edition

Read the OBIE’s Annual Report for 2020 and 2021 on our digital Foleon platform – optimised for desktop, tablet and mobile to ensure a smooth and engaging user experience.

The OBIE’s Annual Report – Print edition

Access the OBIE’s Annual Report for 2020 and 2021 as a PDF – either through your browser or on whatever document reader software your organisation enables.

What’s in store for open banking
Learn about the OBIE’s

objectives and ambitions for the rest of 2021, as we continue to build momentum and enable the thriving open banking ecosystem.

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We’ve come a long way in the last three years.

  • Curating a vibrant ecosystem of banks and fintechs
  • Facilitating the use of a common set of standards
  • Enabling API volumes to grow and adoption to build

Open banking – the future of money, where you’re in control.

Review the presentation material, early impact analysis and Q&A recap from our recent eIDAS webinar, reviewing the FCA’s statement on TPP identification post-Brexit.