Top view of male hands making online payment

A year since its launch, we explore the impact of Open Banking, and whether it’s achieved its goal to help customers make better financial decisions through the introduction of new, useful services 

Open Banking allows retail banking customers to share account and transaction data with trusted partners. When securely shared, the data can be used to build useful services. Customers can look for a mortgage more easily, banks and FinTechs can find customers for new products, and businesses can share data with their accountants.

When we helped start this initiative we could only imagine the potential impact that it could deliver, it's great to see this impact being realised and to use Open Banking's leadership to learn where that impact is different from what we expected.

In April 2019, Open Banking Limited commissioned the Open Data Institute and Fingleton to carry out a review of Open Banking one year on from the start of its rollout. In the report we take a look at the original purpose of the Open Banking standards, the progress Open Banking has made over this eventful year, and the potential that it has to shape the UK economy and beyond.

To give you a taste of what our review has uncovered, here are five key takeaways from our report, Open Banking: Preparing for Lift Off.

  1. Open Banking is still early in its journey. Open Banking launched the first account information APIs in January 2018 and there are now over 130 third party providers (TPPs) developing products. But there is still limited customer use. It takes a while to change an ecosystem.
  2. Open Banking has evolved. The original purpose for the Open Banking initiative was to stimulate innovation in the retail banking sector in order to make the market more competitive. This was hoped to be achieved by allowing personal and small business banking customers to switch current accounts easily. However propositions around account aggregation, and personal and SME financial management have proven much more popular for both banking customers and service providers.
  3. Open Banking is an international phenomenon, with similar programmes being rolled out across multiple countries. Countries exploring different Open Banking-styled initiatives include: Australia, Canada, the EU, Hong Kong, India, Japan, Mexico, New Zealand, Nigeria, Singapore, and the US, among others.
  4. Open Banking is still missing some key functionality that will help it create more impact. This includes improved payments capabilities, stronger consent protections for customers, expansion into Open Finance (including mortgages, pensions, etc.) and developing ’Premium APIs’ that will make it more attractive for banks.
  5. The Open Banking model is an appropriate model to use for other sectors such as energy and telecoms. This is something that we've been exploring for a while. Improved data portability through secure APIs is a structure that could work for more than just retail banking. Energy, telecommunications, and other sectors could benefit from understanding the journey of Open Banking and its potential to help make data work for everyone.

There is still more we are keen to research into this space to help us make data work for everyone. We want to find out who has benefited the most from Open Banking so far, is it consumers, banks, or FinTechs? Which groups of consumers have benefited? How were the standards developed? We are always big proponents of using open standards. How have other initiatives developed internationally compared to the UK? What further role can open data play in this space? There is always more to learn in the realm of Open Banking and we hope to be able to work with others to begin answering these questions.

If you want to discuss the report, or work with us to explore Open Banking and similar data portability initiatives in other sectors then please get in touch