Introduction
Open Banking Limited (OBL) is commemorating the seventh anniversary of the implementation of the Second Payment Services Directive (PSD2) in the United Kingdom. This, in conjunction with the CMA Order, established open banking as a regulatory obligation in the United Kingdom. In the United Kingdom, there are currently over 11.7 million active users of open banking-enabled products, and over 22.1 million open banking payments are made monthly. This technology offers consumers and businesses a straightforward, secure method of managing, transferring, and increasing their financial assets. 2025 is a critical year in the evolution of open banking, as the Data (Use and Access) Bill is currently being debated in Parliament. This legislation will establish a long-term regulatory framework (LTRF) for open banking and facilitate its transition to open finance. PSD2 was implemented in the United Kingdom on January 13, 2018, and it facilitated the transition to open banking in the country. OBL has facilitated the implementation of the Open Banking Standard over the past seven years, which has contributed to the development of an ecosystem that is valued at £4 billion to the economy.
Read: Top 10 Neobank Companies of the Fintech World
The payments and data landscape have been revolutionized by open banking, which has enabled consumers and businesses to more effectively manage, transfer, and profit from their money. Over the past seven years, there has been substantial growth in the number of users, as evidenced by:
- Open banking-powered technology is utilized by 11.7 million individuals on a regular basis.
- 1.7 billion application programming interface (API) queries are made each month.
- In November 2024, there were 22.13 million open banking-powered payments, of which 3.12 million were variable recurring payments.
Read: Fintech and Microfinance: Bridging the Gap for SMEs
Since 2018, there have been nearly 400 million effective payments.The Data (Use and Access) Bill has clearly indicated the Government’s commitment to fostering a smart data economy worth an estimated £10 billion over the next decade by leveraging the data sharing principles of open banking. The Bill will ensure the introduction of the requisite Secondary Legislation, which is essential for the establishment of a long-term regulatory framework for open banking, thereby ensuring its commercial sustainability. Open banking is the first smart data scheme in existence.
The next evolution is open finance, which encompasses a broader range of financial products and services, including investments, insurance, and pensions, as well as other critical economic sectors like energy and telecommunications. Additionally, it enables the implementation of additional smart data schemes. Open banking will be instrumental in the advancement of the Government’s National Payments Vision, as it will promote competition, innovation, and consumer choice in the payments sector in conjunction with the Bill. 2025 is a critical year as we transition to a new entity, transcend our status as a competition remedy, and pursue commercial incentives to continue our successes and establish a smart data economy.
Read: Fintech in Hospitality: Top 10 Fintech Solutions for Hotels
Industry Comments
Marion King, Chair and Trustee of OBL, said: “As we reflect on the last seven years, we should be collectively proud of the financial innovation and the benefits open banking delivers to consumers and businesses, as well as the wider economy. We’re at a pivotal stage in the evolution of open banking, with legislation and regulation coming forward that will not only put it on a commercially sustainable footing fit for the long term, but also move us towards open finance and other smart data schemes.”
Henk Van Hulle, Chief Executive Officer of OBL, said: “Open banking is just seven years young, and much has been achieved. Adoption continues to grow month-on-month, with over 11m active users in November 2024. The UK pioneered with this financial innovation, and our Standard keeps on providing a blueprint for many jurisdictions across the globe. 2024 saw an unprecedented growth and delivery. 2025 will be another step change. This year will see the expansion of open banking into the next generation of open finance and data. UKs thought leadership on data usage and access puts the UK at the forefront of data and payments innovation globally. We will therefore have a keen eye on interoperability, as the industry looks to enable world class cross-border data sharing.”
Read Latest Fintech Blog: DeFi (Decentralized Finance) as a Tool for Financial Inclusion
FAQ 1: What is Open Banking Limited (OBL), and why is 2025 a pivotal year?
Open Banking Limited (OBL) plays a key role in the UK’s open banking ecosystem, which was established through the implementation of the Second Payment Services Directive (PSD2) and the CMA Order in 2018. Open banking has made it easier, safer, and more secure for consumers and businesses to manage and move money using digital tools. 2025 is a crucial year as the Data (Use and Access) Bill is progressing through Parliament, which will help establish a long-term regulatory framework for open banking. This legislation is expected to pave the way for open finance, expanding the scope of open banking into other sectors such as investments, insurance, and utilities.
FAQ 2: How has open banking impacted the UK financial ecosystem?
Since the implementation of PSD2 in 2018, open banking has significantly transformed the UK’s financial landscape. There are now over 11.7 million active users of open banking-enabled products, with more than 22 million open banking payments made monthly. Open banking has led to strong growth in the adoption of digital financial services, including secure payments and money management tools. Over the last seven years, the ecosystem has contributed £4 billion to the UK economy, with 1.7 billion API calls per month and nearly 400 million successful payments. These developments have enhanced consumer choice, competition, and innovation in the payments and data sectors.
FAQ 3: What is the Data (Use and Access) Bill, and how does it affect open banking?
The Data (Use and Access) Bill is a key piece of legislation progressing through Parliament, which aims to build a sustainable regulatory framework for open banking and move the UK towards open finance. This bill allows the introduction of secondary legislation needed to create a commercially sustainable model for open banking, and it will also enable the expansion of smart data schemes. The bill’s passage marks the beginning of open finance, which extends beyond banking to include a broader range of financial products such as insurance, pensions, and investments, as well as other economic sectors like energy and telecoms.
Conclusion
The seventh anniversary of PSD2 and the growth of open banking in the UK represent a major milestone in the financial services industry. With 11.7 million active users and over 22 million monthly payments facilitated through open banking, the sector has already demonstrated its potential to transform payments and data management for both consumers and businesses. As we look towards 2025, the Data (Use and Access) Bill will lay the foundation for open banking’s evolution into open finance, broadening its scope to include new financial products and services. The transition to a new regulatory framework will help create a smarter data economy, supporting innovation, competition, and enhanced consumer choice across multiple sectors. Open banking has already made significant strides, and its future evolution will continue to shape the way financial services are delivered, contributing an estimated £10 billion to the UK economy over the next decade.
Thank you for exploring this journey with us! If you’d like to share your thoughts or join the discussion, please contact us at news@intentamplify.com.
Read: Fintech Marketing: Top 10 Power Strategies to Accelerate Growth
Thanks for reading!