The UK’s Open Banking regime has turned three years old

Open Banking Users

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The UK’s Open Banking Implementation Entity (OBIE) has marked three years since open banking went live across the UK and Europe, per a press release seen by Insider Intelligence. Since the EU’s PSD2 came into effect on January 13, 2018, regulated third-party providers (TPPs), such as fintechs, can integrate with banks’ APIs to access consenting customers’ bank data and offer financial products.

In the UK, the OBIE designs the standards for secure APIs and ensures the effective implementation of open banking nationwide. Since the UK left the EU on January 1, 2021, the country is no longer bound by the PSD2, meaning it will now chart its own open banking course separate from the rest of the EU.

Since 2018, open banking adoption among UK consumers has surged, followed by the rest of Europe.

Financial concerns amid the pandemic have driven UK consumers’ open banking usage. Over 2.5 million UK bank customers now connect their accounts to trusted third parties, up from 1 million in January 2020, per the press release. The rapid growth is likely due to rising fintech adoption as consumers turn to money management apps to help them better handle their finances amid pandemic-induced economic woes. Many of these fintechs use open banking to connect to users’ bank accounts, such as personal finance management apps Snoop and Plum.
The rest of Europe has been slower to adopt but is now catching up, spurred on by open banking fintechs providing secure APIs. There were 178 firms in the UK that were permitted to share bank account and payment information with third parties in October 2020. Germany came second with 36, which is more than France (18), Spain (9), and Italy (6) …read more

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Source:: Business Insider

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