From Open Banking to Open Finance
From Open Banking to Open Finance
Open Banking Regulation was introduced after the global financial crisis to address competition, encourage innovation and foster better outcomes for consumers. By mandating banks to share bank account and payment data in real time, with consumer consent, via secure APIs (an API is a secure, automated way for one system to request and receive data from another system), this broke down long-standing data monopolies and enabled a new ecosystem of financial services.
The Results Have Been Striking
In the UK alone, Open Banking is now used by one in three adults, with over two billion API calls made each month — around 135 per adult. It has transformed:
- How consumers bank and pay
- How we manage money and access finance
- How businesses communicate with their accountants
- How advisors assess affordability and cash-flow in real time
Three Crucial Lessons from Open Banking
Since 2018, Open Banking has demonstrated three crucial principles:
1. Consumers Will Share Data When Value is Clear
- Digitally confirming a payment while online shopping is easier and faster than initiating a payment manually
- When applying for mortgage or debt, sharing your banking data electronically is safer, faster and easier than downloading and sending multiple statements
- Business Banking, accounting and payroll systems can interact via API to provide accuracy, efficiency and seamless user experience
2. Standardised, Regulated APIs Can Operate Securely at Scale
The infrastructure has proven robust, handling billions of transactions while maintaining security and compliance.
3. Open Data Drives Competition, Efficiency and Innovation
Europe is now home to over 10,500 Fintech businesses, 140 of which are unicorns – it’s clear that open data regulation has been a powerful catalyst.
What Comes Next
Yet it feels like Fintech is only getting started. Open Finance will extend these proven principles to all major financial products — pensions, investments, insurance, and more. The foundations laid by Open Banking have shown what’s possible, and the industry is ready for the next evolution.