The third anniversary of Open Banking in the UK: A cause for celebration?
Three years on from the implementation of Open Banking in the UK and the technology is reaching maturity, with close to 300 third parties in the ecosystm and almost three million users among the populace.
From one million users in January 2020, the number doubled to two million in August 2020, and is set to hit three million over the coming months, says the OBIE. At the same time, the number of third party providers making use of the technology has grown to 294 regulated entities, of which 102 have live offerings in the market.
Commenting on the progress, Imran Gulamhuseinwala OBE, Implementation Trustee, The Open Banking Implementation Entity (OBIE), says: “Open banking used to be the best kept secret in financial services. We have worked hard to develop the open banking infrastructure and functionality over the past three years and our significant progress is reflected, not only in the millions of active users of open banking technology each month, but in the sustained momentum of growth we are seeing.”
Not everyone in the market shares Gulamhuseinwala’s optimism. In November last year, a report commissioned by bank data specialiist Plaid on behalf of the the Coalition for a Digital Economy (Coadec), claimed that Open Banking roll out had been stymied by overly-prescriptive technical standards and anti-competitive security measures.
Specifically, the report called on the government to grant Brits a new data sharing right, similar to that enacted in Australia, that empowers them to own and share financial data.
“This would see off efforts by banks to entrench their dominance by levelling charges on third party startups for accessing financial data – via so-called ‘Premium APIs’,” the report stated.
In addition, Coadec says the government must remove the 90-day re-authentication rule, which has seen startups face massive customer attrition rates.
Meanwhile, the report predicts that the quick-wins for Open Finance will be in the savings, credit, mortgages and pensions markets, and says the FCA must make these the first sectors to open up their data first to consumers via open source APIs.