By Oliver Smith on Monday 28 September 2020
Lockdown has been a tremendous boost for the adoption of these financial APIs.
Despite the huge disruption caused by Covid-19, open banking and the fintech ecosystem have been significantly boosted by the period of lockdown.
According to an OBIE survey of 2,000 UK adults, one-in-five started using online banking apps during lockdown to the first time with over half (54 per cent) now using them regularly.
“Open Banking used to be the best kept secret in financial services. With 2 million active monthly users and growing strongly that is clearly no longer the case," said Imran Gulamhuseinwala, Implementation Trustee of the OBIE this morning.
"We can now see that people want to exercise their rights over their data and will do so, as long as you make it simple and secure. Open banking enabled products are rebalancing the market in favour of consumers and small businesses. Users are now able to engage more with their finances and getting access to better products.”
As mentioned in the OBIE’s last figures from January, the numbers are likely an underestimation of the true size of open banking adoption given the data is provided by the CMA9 (the nine largest banks in the UK) and doesn’t include the likes of Starling Bank, Monzo, etc.
While the OBIE said money management apps and account aggregation are the most popular use cases of the open banking today, it points to payments are the upcoming area of growth for the technology.
Banks like NatWest and fintechs including Monzo and Nutmeg have been rolling out open banking payments this year, which lets users initiate bank tranfers without going through the hassle of using sort codes and account numbers.