UK Open Banking Users Swell to 7M  

More than a million British customers used open banking for the first time in January.

The addition of 1.2 million first-time users during the month raised the number of consumers and small and medium-sized businesses (SMBs) using open banking in the United Kingdom above the landmark figure of 7 million for the first time, Open Banking Limited (OBL) reported in a Tuesday (Feb. 21) press release.

“It is significant that 1.2 million of these are first-time users,” OBL CEO Henk Van Hulle said in the release. “From access to cost-effective credit, building a regular savings habit or making more informed financial decisions — open banking is delivering the means for our citizens to improve their financial wellbeing.”

This announcement comes five years after open banking was made a regulatory requirement in the U.K. by the Second Payment Services Directive (PSD2), according to the press release.

That piece of legislation, which was implemented when the U.K. was still a member of the European Union (EU), gave banks a mandate to share customer account information with authorized non-bank third parties. To enable this, PSD2 required financial institutions to create application programming interfaces (APIs) to make payment initiation and account information requests.

The OBL report also comes at a time when key recommendations about the future of open banking are soon to be announced, the release said.

OBL Chair and Trustee Marion King said in the release that open banking increases competition and allows consumers and small and medium-sized businesses (SMBs) to use new and innovative financial tools.

“As we await key recommendations on the future for open banking from the Joint Regulatory Oversight Committee, this strong growth underlines the need to continue the momentum so that the many benefits of open banking are developed, promoted and made available to millions more of our citizens,” King said in the release.

As PYMNTS reported on Jan. 16, the U.K.’s banking sector is looking to the next stage of open finance, in which a new authority will succeed the implementation entity.

As outlined in a recent statement made by the multi-regulator Joint Regulatory Oversight Committee (JROC), the new authority will have responsibilities to the broader open banking ecosystem.