As Open Banking continues to play a vital role in the UK’s payment space, its true benefits won’t be fully unlocked until its future roadmap is set, according to GoCardless CEO and Co-Founder Hiroki Takeuchi.
The introduction of Open Banking in the UK came in 2017 as part of steps taken by the Competition and Markets Authority’s (CMA), to enhance the retail banking space.
On the significance of the milestone, Sarah Cardell, Chief Executive of the CMA, said: “The update is an important milestone. The largest banking providers in the UK have completed the roadmap, and so Open Banking moves into a new phase.
“We will continue to ensure the standard is maintained and that providers are held to their obligations under the CMA’s Order, including making sure those remaining banks reach the same data sharing standard.
“The OBIE’s work is vital to the ongoing success of Open Banking and we look forward to continuing to work closely with the FCA, PSR and HM Treasury to help deliver the future arrangements for Open Banking.”
As the usage of the tech continues to accelerate, the number of active users of Open Banking has now surpassed six million in the UK, with Takeuchi underlining it has changed the face of UK finance.
In terms of what the future holds for the space, Takeuchi added: “Open banking has changed the face of financial services in the UK; from better, safer banking experiences for consumers to more affordable services for businesses that truly rival traditional costly payment methods like cards.
“As we mark the five-year anniversary of the OBIE and the substantive completion of the CMA’s roadmap, with more than six million active Open Banking users and over a billion successful API calls in November 2022, up 25% on the previous year, it’s time to set the future of Open Banking on a successful path so we can unlock many more benefits.
“We look forward to seeing the Joint Regulatory Oversight Committee’s (JROC) final recommendations for the OBIE’s successor alongside its open banking roadmap, including how the Government, regulators, banks and fintechs can work together to drive innovation. It is essential that we don’t take our foot off the pedal.”
Key to the growth of Open Banking is enabling consumers and businesses to share their transaction data securely with trusted third parties who can provide customers with applications and services which save them time and money.
The level of data sharing enabled by Open Banking is key to boosting a whole host of factors, including innovation in the space. Whilst established banks have accounted for over 80% of the current account market for many years, the implementation of Open Banking enhances the financial decision making abilities of consumers and businesses.
Underlining the scope of the impact Open Banking has had, Oliver Shaw-Latimer, Senior Director of Fintech & Innovation at JustGiving, also lauded the tech, detailing how crucial it has been in changing the way people donate to charitable organisations.
Shaw-Latimer said: “Open Banking has revolutionised the way in which people can donate, and the speed at which charities and good causes can receive donations.
“That benefit, in addition to cutting down the risk of fraud, charged back or failed payments, made adopting Open Banking payments a no-brainer for us.
“Processing costs on Open Banking are also significantly lower than those on credit or debit card payments, meaning we’re able to maximise the money that goes to charities and good causes.
“With much of the fintech community only just beginning to understand the power of Open Banking, it’s a very exciting time and we’re very much looking forward to further developments in the space over the coming years.”
Payment Expert Analysis: Open Banking has already had a revolutionary impact on UK payment and financial services. Key to its growth is undoubtedly the continued implementation of a future roadmap for growth – something that can also be crucial for minimising economic damage during the cost-of-living crisis.
