Over one billion payments have been made in the UK through open banking, with 100 billion requests sent to application programming interfaces.
According to Open Banking Limited, the two milestones reflect the UK’s leadership in the system, allowing finance firms to share data with permission from customers.
Open Banking Limited also reported operational improvements, shaving 50 milliseconds (ms) off the time it takes for a response to a payment request, which now stands at 349ms.
It was 2017 when the Competition and Markets Authority’s Retail Banking Market Investigation Order meant UK banks were required to implement open banking regulations, which led to the development of application programming interfaces (APIs), to give consumers more control over their bank accounts.
The end goal was to increase competition in a retail banking sector dominated by big financial services companies. Customer banking data is shared by the industry through APIs, with customers’ permission, enabling businesses to offer tailored products.
Henk Van Hulle, chief executive officer of Open Banking Limited, said the milestones “reinforce the UK’s position as a global leader in open banking and demonstrate an ecosystem that continues to scale in both volume and capability”.
He added: “As adoption increases and new use cases emerge, open banking will play an increasingly vital role in supporting competition, innovation and growth across the UK’s financial services landscape.
“As we look ahead, our focus remains on building on these achievements. By continuing to strengthen resilience, performance and innovation, we can unlock even greater value for consumers, businesses and the wider economy, while supporting the next phase of the UK’s open banking and open finance journey.”
Open finance will see firms use APIs to share banking data across more services, such as mortgages and loans, and offer products and services from external organisations.
There is potential for open banking to benefit the UK economy to the tune of £43bn a year when it reaches full maturity, but the industry must heed recent warnings against complacency.
According to research commissioned by Open Banking Limited, the UK has already achieved £8.2bn in economic benefits through open banking. The analysis, carried out by EY earlier this year, found that open banking could deliver £7.4bn a year within five years, rising to £43bn a year when open banking is fully mature.
But the UK has work to do to reach this potential. In February, at an open banking event in London, Ron Kalifa, former CEO of fintech giant Worldpay, who produced a landmark government-commissioned fintech report in 2021, warned that the UK is losing its leadership in open banking, having “laid the rail track, but hesitated to run the trains”.
At the time, he lauded the achievements so far. “I think we can say with great confidence that we have made great progress,” he said in the February event.
“Fintech has become one of the UK’s most important economic engines. It’s no longer an idea on a whiteboard, it’s no longer a promise of future growth – it is delivering here and now.”
Kalifa noted that open finance, “once the next chapter” of open banking, is “still waiting to land”, and pointed to the way countries such as Brazil and India are moving ahead.
