Exclusive: Latest Open Banking data shows TPP ecosystem at a plateau

The number of third-party providers has remained constant for nearly 15 months.

After years of growth, dating back to when the project started in 2018, the Open Banking Implementation Entity (OBIE) today reported that no new regulated third-party providers have joined the ecosystem since September 2021.

The figures, shared with AltFi exclusively ahead of their publication in the OBIE’s bi-annual Impact Report, are a marked change from the first three years of the UK’s open banking project when the number of new third-party providers (TPPs) grew rapidly.

TPPs refer to fintechs and open banking providers that are directly regulated by the FCA, and include the likes of Plaid, TrueLayer, Moneybox, Revolut and Funding Options.

Between January 2018 and March 2021, the number of TPPs rose to 126, but by September 2021 the number had risen by only two to 128, and in the latest data covering the period to March 2022 that number has stayed static at 128 (1 new provider was added, but another withdrew its services).

The OBIE said that its Impact Report analysis, which has always been limited to TPPs, now only “provides a partial picture” given many fintechs opt instead to act as agents of regulated TPPs, rather than pursuing a costly and lengthy FCA accreditation.

Those agents of regulated TPPs, of which there are currently 142, will be included in the OBIE’s monitoring of the open banking landscape going forward.

“To help demonstrate the value of open banking to the UK economy and society, it is important that we show the availability and diversity of the full open banking ecosystem,” the June 2022 Impact Report states.

Elsewhere in the report, the OBIE estimates that 10–11 per cent of digitally-enabled consumers used open banking in March 2022, up from 6–7 per cent in March 2021.

Digitally-enabled consumers refer to the digitally active customer basis of the CMA9 banks.

The OBIE also identified that penetration among businesses (11 per cent) is slightly higher than consumer usage (10 per cent), which the organisation says is partly due to the rise of cloud accounting software, much of which pre-dates the launch of open banking itself.

Payments also remain a significant area of growth, with the report tracking 21.1m open banking payments in the six months to March 2022, up from 6.1m the previous year, and a figure that’s currently growing at 10 per cent month-on-month.

“I am really pleased to see continued growth of open banking products across consumers and SMEs,” said Charlotte Crosswell, chair and trustee of the OBIE.

“From allowing people to get their mortgage approved more quickly to paying HMRC, utility bills or charitable donations, the products available continue to grow and are becoming more visible.”