Metrics Monthly Q1 | 22

Go to contents page

Major milestones for Open Banking This quarter we saw two major mile- stones for the Open Banking initiative. In January, the revised Payment Ser- vices Directive (PSD2) turned four years old, and to celebrate the occasion we wanted to look back at how far it has come, and what we can expect for the future. The Open Banking movement has changed the way that products and services are being consumed across the world. The UK was considered to have largely led the way with it, after the Open Banking Standard was imple- mented in January 2018, allowing con- sumers to have the legal right to access their payment accounts through third parties. The adoption of Open Banking began gradually as providers built the neces- sary API technology but events of the past two years accelerated the move- ment. As a result of the 2020 coun- try-wide lockdown, existing trends towards electronic payments advanced, showing us that the future of the finan- cial industry relied on the adoption of faster digital methods. Whilst not a great year for many of us, 2021 proved to be great for Open

Banking, with over £10 billion worth of payments made using it in that year alone. You may remember our article Open Banking in a Pandemic, which looked at how the initiative was able to help those whose personal finances were affected by the Covid-19 crisis. Open Banking became instrumental in providing access to up-to-date bank transaction data, allowing lenders to gather a detailed picture of a consum- er’s finance. Platforms such as Lend- ingMetrics’ OpenBankVision (OBV) allow finance provider to access accu- rate data, in real-time, meaning they can make better lending decisions and relia- bly assess affordability. Also in January, the initiative reached another impressive milestone of having more than 5 million active users in the UK. This marks an important moment, as the trajectory of this growth con- tinues to increase: in 2020, it took 10

months to grow the number of users from 1 to 2 million, but has only taken 4 months to increase from 4 to 5 million more recently. Trustee of the Open Banking Implemen- tation Entity (OBIE) Charlotte Crosswell commented: “Open Banking was pred- icated on delivering increased com- petition and providing consumers and small businesses with new and innova- tive solutions. It is therefore extremely encouraging to see that more than 5 million active users are now leveraging the benefits of open banking. "This accelerated growth strongly rep- resents a world-leading and thriving ecosystem bringing an ever-increasing range of real-world solutions, that in turn is driving mass user adoption. As open banking technology embeds and becomes easier to use, we look forward to seeing this momentum continue.”

The LendingMetrics Exchange Multi-bureau CRA data AML and ID verification Exclusive premium service Find out more

Metrics Monthly | 07

Made with FlippingBook - professional solution for displaying marketing and sales documents online