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The UK has officially reached the milestone of 6 million open banking users, with the Open Banking Implementation Entity (OBIE) revealing that open banking payments are growing 500% year on year. At Tink, we expect this significant growth to continue to pick up the pace during 2022 and predict we’ll see 10 million official users by the end of the year.
Open banking has now reached maturity in the UK. Whether it is connecting bank accounts for onboarding purposes, risk evaluation, or account-to-account payments - it is clear open banking is here to stay.
Upcoming legislation will only boost growth further: firstly, once banks adopt the OBIE’s Open Banking Standard version 3.1.10, the need for users to reauthenticate details with their bank every 90 days is removed; they will only need to reconfirm their consent with the service provider. This will significantly reduce user churn.
Secondly, HM Treasury’s amendments to the Money Laundering Regulations of 2017 that removes third parties providing Account Information Services (AISPs) from its scope, will vastly improve the experience for people when requesting to use open banking services. This ruling will reduce friction at the point of onboarding, by enabling users to swiftly and securely verify account ownership by connecting to their bank account, without any additional hurdles. While the number of banks third-party providers can connect to for data access will continue to grow, widening the number of people that can make use of open banking services. This together will help to foster a more thriving open banking ecosystem.
Finally, it is worth noting that open banking has an important social role to play. As the cost of living rises, the FCA has highlighted the importance of protecting vulnerable consumers. Open banking services enable lenders to get a real-time display of an individual's financial situation, unlocking more accurate, responsible lending. Usage of such services is projected to increase significantly.
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