By Aisling Finn on Wednesday 16 September 2020
The UK’s financial institutions prioritise the more customer-focused side of open banking compared to their European counterparts.
Swedish fintech Tink has found that a third of the UK’s financial institutions spend up to £93m (€100m) on open banking.
The fintech also discovered that almost half (47 per cent) of UK-based financial institutions spend anywhere from £1m to £46m on implementing open banking, with the median spend on the process sitting between £46-93m (€50-100m).
Tink’s findings, published in a report today, also highlight the growing importance of open banking within firms across Europe, with nearly two thirds (63 per cent) reporting that their budgets for open banking have increased, with some reporting double-digit growth year-on-year.
Since the introduction of the EU's Second Payment Services Directive (PSD2) in January 2018, open banking has revolutionised the way millions of people manage their finances and use their data, with the coronavirus pandemic only compounding this shift towards open finance even further.
Financial institutions in the UK also had the keenest focus on ‘know your customer’ (KYC) processes, aimed at streamlining compliance and customer experiences, with UK-based firms reporting a 20 per cent higher spend on average than their European counterparts.
Rafael Plantier, UK & Ireland country manager at Tink, said: “It’s encouraging to see that many UK financial institutions are continuing to realise the benefits of open banking and investing in use cases that look past compliance.”
“Our latest data shows that most financial institutions in the UK are taking advantage of the accelerated shift to digital banking caused by Coronavirus, prioritising investment in customer-first use cases to facilitate better customer experience.”
The UK’s second top investment area is financial management services (53 per cent), which is, again, considerably higher than the European average (36 per cent).