UK nabs top spot in open banking league table

The UK has taken the top spot in a league table ranking open banking adoption among European countries.

The research, from open banking infrastructure provider Yapily, ranked 18 European countries on a 10-point scale according to the maturity of open banking in each market.

The research assessed factors such as local regulatory oversight and enforcement, the digital readiness of the population, domestic payments infrastructure, bank integration, the presence of third-party providers (TPPs) and API performance and standardisation.

The news comes after the OBIE revealed in June at AltFi’s Open Banking Forum 2022 that open banking payments are growing 500 per cent YoY in the UK, with a record 6m users now using open banking.

Yapily’s research found that the UK is among the most advanced countries in Europe when it comes to enabling APIs for third party payments providers (TPPs) to utilise, as well as processing the largest number of API calls and payment volumes over the last 12 months compared to its European neighbours.

Yapily’s research also praised the role of the UK’s Faster Payments System in terms of speeding up the process of sending and receiving money via bank-to-bank transfers and enabling open banking payments to accelerate at speed.

However, the research claimed that “the CMA must mandate Variable Recurring Payments (VRPs) beyond sweeping for UK banks” and that “if the CMA and other banks can start to implement premium APIs beyond the minimum regulatory requirements, we will see the UK’s open banking ecosystem continue to accelerate”.

The research also highlighted overall user experience and API quality as areas for improvement for the UK and said that the CMA’s order on open banking coming to an end later this year could “slow momentum”.

Though the UK is squarely in the lead, open banking adoption is strong throughout Europe according to the research, 67% of the markets analysed improved or maintained their scores since 2021.

Germany and Sweden were hot on the heels of the UK, placing second and third respectively.

Yapily’s research praised the maturity of the German market when it came to API availability, however it said that some TPPs in the region often rely on legacy systems to implement their connectivity.

The research praised the quality of Sweden’s regional regulatory regimes, “highly developed” digital infrastructures and collaborative approach to cross border payments,­­­­ but said it should focus on standardising APIs and improving bank uptimes to move up the table, with UX flows and API quality continuing to differ per bank.

While many European nations achieved relatively similar scores in the rankings, others fell far behind.

Iceland came last in the rankings, as none of the small island nation's three commercial banks offers open banking despite the country having a “strong and healthy” fintech scene.