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Paul Marcantonio on the Current State of Open Banking in the UK

ECOMMPAY analyses the current state of Open Banking in the UK, and what needs to be done to educate consumers so businesses can feel the benefit.

Paul Marcantonio, Executive Director UK and Western Europe, ECOMMPAY
Paul Marcantonio, Executive Director UK and Western Europe, ECOMMPAY

In this guest-authored piece for The Fintech Times, Paul Marcantonio, the Executive Director UK and Western Europe at ECOMMPAY, details the current state of the UK Open Banking market and offers suggestions on how to educate consumers for the benefit of the economy.

The UK often leads the charge in fintech innovation and growth, and Open Banking is no different. Since its inception as part of the European PSD2 legislation in 2018, Open Banking has made it easier for consumers to manage their finances and for businesses to benefit from better payments solutions. Almost 300 fintech companies and payment service providers have joined the Open Banking ecosystem in the UK and with 102 of those live in the market, the number of people sharing their data through Open Banking has tripled since the start of the pandemic.

However, three years on almost half (48%) of UK consumers still find the concept of Open Baking confusing and only 14% claim to completely understand it. On the business side, just 36% of leaders said their company had adopted Open Banking before 2021, with bigger businesses more likely to have done so. Although, one in 10 (10%) business leaders said they still don’t know what Open Banking is or how it could help their business.

With the shift to cashless unlikely to slow down, there is a strong demand for payment options that are safe, secure, and convenient that Open Banking can provide. Businesses can enrich and personalise the customer experience to reduce pain points and benefit from faster payments. Open Banking provides a clear opportunity for real innovation from the fintech industry, but first, we need to understand the state of the UK market and what needs to be done to educate consumers so businesses can feel the real benefits.

The structure of the Open Banking market

By partnering with regulated banks, third-party providers (TTPs) can offer the consumer Open Banking services. Aggregators – the majority are Technical Service Providers (TSPs), but they can also be Payment Service Providers (PSPs) or stand-alone solutions – can work with variety of TTPs to establish better connections to the banks and provide a full scope of services. TTPs can have connections with up to 30 banks and some connections will be better than others. It’s the quality of those connections that is important, as competitors will also have this quantity and the trust of the consumer could be lost if they receive a data error from a bad connection.

To differentiate themselves PSPs can add other services such as payouts and enhanced fraud prevention technologies to their Open Banking offerings.

All TPPs have the same APIs and work with the same banks, this need to differentiate and provide a USP will push further innovation within the fintech market. However, as Open Banking is limited to the ability of the banks using it, they must focus on upgrading their APIs while also educating consumers on the benefits of what Open Banking offers.

Building trust with businesses and consumers

Open Banking may seem a daunting concept to both consumers and businesses. For consumers, giving access to personal financial information requires trust. Wider education is needed to share information and proof of Open Banking’s benefits. This will continue to be a gradual process but more communication on the licenses held, and permissions asked for, as well as giving visibility to the banks using the technology instead of the unknown TTPs will help build this trust with the consumers.

For businesses, choosing the right Open Banking provider is critical. With hundreds to choose from in the UK alone, it’s worth looking for an expert not just in Open Banking but one that understands the technicalities of payments, what the best results look like, and offers a high quality of service across multiple products. There are now hundreds of players within the Open Banking market, and if these TPPs wish to be trusted, they must provide the latest and easiest technology in their solutions to appeal to both banks and businesses. Furthermore, to provide the best service, they will also need to have expertise on payments, UX design, and quality control, as well as being proactive in understanding and combatting the latest fraud and scamming attempts.

It will likely take few more years of education, trust-building, and proof for Open Banking to be more widely accepted in the UK. With the increase in banking fraud and payments scams taking place, it’s easy to understand why businesses and consumers are wary of Open Banking. Ultimately, Open Banking’s benefit to the industry will become more evident as it spends more time within the market, giving rise to more acceptance and more innovations from providers. It should be seen as a long-term payment infrastructure investment, with the value of the Open Banking market set to reach $43.15 billion globally by 2026.


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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