Open banking reaches 3-year anniversary
Today marks the third year since open banking became a regulatory requirement.
On 13 January 2018, the European Union’s Payment Directive Services 2 came into force to introduce the data-sharing initiative aimed at increasing competition and choice for consumers and small businesses.
Read more: Lending Works chief urges lenders to adopt open banking
Since 2019, the number of third-party providers, the businesses which use open banking technology, has increased to 294.
In 2018, 320,000 open banking payments were made and this rose to over 3.4 million in 2020.
The number of people using open banking to move, manage and make the most of their money has increased from one million in January 2020, to two million in August last year and 2.5 million people today. This shows growth of one million new users every six months.
Read more: ThinCats notes “great advantage” of open banking for cashflow lending
The number and range of new product offerings has also risen. As of December 2020, 294 regulated providers were in the ecosystem, with 102 having live offerings in the market.
The number of API calls has increased from 66.8 million in 2018 to almost 5.1 billion in 2020 while API call volumes reached 6.5 billion between 2018 and 2020.
Read more: Open banking directory launched
Since its inception, the UK’s Open Banking Implementation Entity (OBIE) has worked closely with the government and regulators to create an ecosystem for open banking that allows for innovation.
OBIE said open banking is on its way to revolutionising the way individuals and businesses can use their financial data for their benefit.
“Open banking used to be the best kept secret in financial services,” said Imran Gulamhuseinwala, implementation trustee of OBIE.
“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.
“We have developed a world-leading, thriving ecosystem of nearly 300 regulated providers, who collectively are bringing innovative new products and services to market.
“While there is still much to be done, individual consumers and small businesses are already seeing the benefits of the ecosystem and functionality we have put in place.”
Read more: The need to share data
“With the third anniversary of its implementation today, open banking is entering a new mature phase of its development,” said Dan Weaver, open banking expert at Equifax UK.
“The initiative’s credentials are now widely established, offering creditors the perfect pandemic tool to assess the most accurate picture of an individual’s finances.”
Some peer-to-peer lending platforms which use – or plan to use – open banking include Lending Works, RateSetter, Leap Lending and Rebuildingsociety.
