Open banking has reached its four-year anniversary but is showing no signs of slowing down, with more peer-to-peer lending platforms and consumers adopting the data-sharing initiative.
Today (January 13) marks the fourth anniversary of the Payments Services Directive 2 making open banking a regulatory requirement in the UK. There are now 4.5 million regular users of the technology, a 60 per cent rise from 2.8 million in December 2020.
3.9 million consumers and 600,000 small businesses are now using open banking. And many P2P platforms are also utilising it, such as Rebuildingsociety, Kuflink, JustUs and ArchOver, while more are implementing it or looking at doing so.
Read more: Is open banking making waves in P2P?
They can use the data-sharing initiative to quicken processes, fraud prevention and better assess the affordability of borrowers.
Kuflink introduced instant bank transfers using open banking in August while Simple Crowdfunding and Invest & Fund have expressed interest in the scheme.
Meanwhile, new P2P consumer lending platform Plend is awaiting final regulatory sign off ahead of a planned launch this year with the requirement that borrowers and investors both opt in to open banking.
The platform plans on using it for fraud prevention, credit scoring, fraud prevention, collecting payments faster and verifying information quickly.
Read more: More platforms embrace open banking
Experts have also predicted that uptake will rise in the sector.
Emma Steeley, chief executive of Equifax’s AccountScore, has predicted that P2P platforms will implement the data sharing initiative and the early adopters will start utilising it for more uses.
Read more: P2PFN‘s special report on open banking
Furthermore, the Open Banking Implementation Entity has forecast increased momentum of open banking adoption in the UK in the year ahead, with further potential in financial products that merge data and payments, and the large UK banks’ implementation of variable recurring payments.
Open banking has now been around for four years and is continuing to grow in customer adoption, including consumers and P2P platforms, and this is set to continue.
2022 could be the year in which open banking grows to new strengths and records for the P2P sector and in general.