More than 6 million individuals and businesses in the United Kingdom regularly use open banking services, the U.K.’s Open Banking Implementation Entity (OBIE) announced in a newly-released report.
OBIE is a standards-setting body for the sector, and it releases an open banking report twice a year.
Open banking using open source software and standards-based systems to expand authorized access to bank account holders’ financial data. A recent PYMNTS analysis concluded that open banking began in Europe, according to many observers, and is catching on there — but it also has huge potential in the Middle East and Africa.
“From allowing people to get their mortgage approved more quickly to paying … utility bills or (making) charitable donations, the products available continue to grow and are becoming more visible,” Charlotte Crosswell, OBIE chair and trustee, said in a prepared statement accompanying the group’s report.
The report also found that 10% to 11% of digitally-enabled consumers and small businesses used some sort of open banking service during March 2022 — up from 6% to 7% in March 2021.
Additionally, the report said that business-market penetration for open banking stands at about 11% compared with consumer-market penetration of 10%. The report’s authors noted that businesses were quick to adopt open banking-based products and consumers are catching up.
Over the past six months, according to the report, payment volume on open banking-related services has increased dramatically — around 21.1 million transactions over the six months through March 2022, compared with 6.1 million during the same six-month stretch ending in March 2021.
The report also documented expansion in the number of businesses using cloud accounting products that rely on open banking.
“Cloud accounting software has been around for a few years, but it’s interesting to see the positive feedback from businesses, small and large,” Crosswell said. “Open banking is making the service more effective and helping businesses keep on top of admin and managing cashflow. There’s certainly more work to be done to encourage sole traders and smaller businesses to adopt it, but it is encouraging to see the value it is adding.”