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Open Banking celebrates four year anniversary amid debate about its effectiveness

The OBIE has said more government departments will use open banking in the coming year and that it now has over 4.5 million regular users, but critics say that the adoption of open banking is behind where it should be.

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Charlotte Crosswell/OBIE.

More government departments will adopt open banking over the next 12 months, according to the body behind the initiative, which today celebrates its four-year anniversary in the UK amid a continued debate about its effectiveness and adoption.

The Open Banking Implementation Entity (OBIE), the body established to deliver open banking, today pointed to key metrics including over 4.5 million regular users of open banking to underline its success.

It said in the past year, there has seen a 60 per cent lift in new open banking customers, with 3.9m consumer customers and 600,000 small business customers.

A further statistic is that there are 1 million regular and active users joining every 6 months to open banking, which is designed to heighten competition in the banking sector.

The OBIE predicts “increased momentum" behind open banking in the year ahead, with more government departments adopting it.

Last year, HMRC became the first government department in the world to adopt open banking payments.

But the four-year anniversary comes amid a continued debate about the effectiveness of open banking and adoption rates.

Some fintech leaders believe the adoption of open banking is behind where it should be.

Meanwhile, Starling boss Anne Boden recently told a Treasury Select Committee comments, that open banking has failed to encourage bank account switching.

Boden’s comments were criticised in a letter signed by 53 fintech founders, which was sent to MPs accusing Starling of being among the banks trying to “stifle this innovation” and claims that Boden’s comments were “uncompetitive and typical of banks trying to thwart the future of innovation in financial services”.

Charlotte Crosswell, Chair and Trustee, Open Banking Implementation Entity (OBIE), who was bought in following a bullying scandal at the OBIE, said “The progress made by the entire industry during the past four years to make open banking in the UK a success has been astounding. 

“Ultimately, I’m delighted that we are beginning to see how open banking is giving people more control over their money." 

“The pandemic has changed consumer behaviour, with an increase in the use of digital and financial services. We continue to see customer growth alongside new and exciting products, and as even more are introduced into the market, open banking will become increasingly mainstream.  That will be key to taking user adoption from over four million to tens of millions."

Jack Wilson, head of public policy, TrueLayer, said: “Nowhere is Open Banking's value more apparent than its ability to deliver instant payments, where it can move money at a fraction of the cost, more securely using biometrics and more conveniently than other methods.

"In 2021, more than £10 billion in payments was processed through Open Banking, and this number is set to keep on growing in 2022.

“Open Banking is still evolving, with a number of changes coming into effect over the course of 2022 - the removal of the 90-day re-authentication rule and the introduction of Variable Recurring Payments (VRP) - which will unlock further value for consumers.”

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Jack Wilson

Head of Policy & Regulatory Affairs


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