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There are now more than 5m active users of open banking services in the UK spurred on by greater interest in payments for government services.
Payments have been a driving force behind the recent growth of open banking, according to the Open Banking Implementation Entity (OBIE). Nearly 625,000 additional payments in January 2022 were made via open banking compared with December 2021.
A significant factor in this payments growth was HM Revenue & Customs’ incorporation of a "Pay by bank" option into its annual self-assessment process.
This took the total number of payments made via open banking to 3.86m in January 2022, an increase of 19.3 percent compared with December 2021.
The 5m milestone follows the fourth anniversary of the revised Payment Services Directive (PSD2) in January. This made open banking a regulatory requirement in the UK.
“Although this has been a tough journey, the UK growth of both consumer and SME adoption to above the combined five million mark shows that the process is working,” Gavin Littlejohn, chairperson of FDATA Global, told VIXIO.
Littlejohn continued: “With the FCA having also recently adjusted the strong customer authentication regulation to make it easier for customers to remain connected to their chosen applications, we can expect to see both the data sharing and payments initiation use cases continue to grow.”
There is also strong evidence that uptake in open banking services is beginning to accelerate.
For example, it took ten months to grow the number of users from 1m to 2m in 2020. By comparison, in the four months to January 2022, it added another 1m users, taking the total to 5m.
Commenting on the milestone, Charlotte Crosswell, trustee of the OBIE, said: “Open banking was predicated on delivering increased competition and providing consumers and small businesses with new and innovative solutions.”
“This accelerated growth strongly represents a world-leading and thriving ecosystem bringing an ever-increasing range of real-world solutions, that in turn is driving mass user adoption,” she continued. “As open banking technology embeds and becomes easier to use, we look forward to seeing this momentum continue.”
Meanwhile, Henk Van Hulle, the newly appointed CEO of the OBIE, said that this made it a “great time to be joining”.
“This demonstrates that the tremendous efforts of everyone across the whole ecosystem continue to bear fruit. It also shows what a superb job the team at the OBIE are doing in building and running the supporting infrastructure,” he said in a statement.
Hulle, who joined the OBIE after having worked with the Post Office, comes at a time when the entity has been mired in scandal.
In October, an investigation concluded into complaints that found it allowed a culture of bullying and intimidation to prevail. As well as an array of negative publicity at news outlets such as The Daily Telegraph, it ultimately led to the resignation of now-former OBIE chair Imran Gulamhuseinwala.
