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​Startling report reveals UK could lose its Open Banking pole position status

  • Publish Date: Posted about 1 year ago
  • Author:by MERJE

A recently published report has claimed that the UK, a global leader in Open Banking, is at risk of losing out on its prestigious prime position in 2023 unless major steps are taken to rectify the situation.

The Global Open Finance Index, an in-depth industry resource that was released by Open Banking Excellence (OBE), is a data-driven exploration of the international state of Open Banking that features insights from more than 400 Open Banking and Open Finance experts. It builds on initial data following a series of interviews that were conducted by the University of Oxford with contributions from which included contributions from Accenture and NatWest that were used in conjunction with secondary data from the World Bank and the IMF.

This comes as OBE acknowledged that the Open Banking space represents a huge export opportunity for UK firms. This is because UK tech companies have the knowledge and experience to support countries across the world to positively impact their economy, society and environment, while simultaneously addressing an export-lead market that has been estimated to be worth up to $400 bn per year by the end of the decade.

However, this position is now at risk, due to a stagnant economic situation in the UK, combined with an enormous acceleration in global competition. For example, India’s Open banking rollout has created a group of more than a billion accounts accessible to the same standard that the UK enjoys. In addition to this, members of OBE’s community in Brazil reached five million connected accounts in one-fifth of the time it took the UK, while Australia is staying well ahead of the curve in the Open Energy sphere.

In order to keep abreast of the developments, Open Finance needs to be looked at with renewed vigour. One way of achieving this is to bring forward a data bill that is currently sitting stagnant in Parliament. Another is to resolve the uncertainty around the future governance arrangements for Open Banking, while a final approach is to fully integrate regulatory passporting into future trade agreements. If these measures are put into place, then the door is open for UK tech firms to play a leading role in a period that will see a total shift in the way people relate to their money, rather than merely watching the action from the sidelines.

The report went on to analyse 23 countries across more than 150 aspects of Open Banking to identify the component parts of a successful ecosystem. It found that while the UK was still seen as a global leader, countries like Brazil, Singapore, India and Australia were moving faster and are likely to eclipse the UK in the near future.

Another key finding was that, while regulatory mandates help budding ecosystems to establish themselves, it is fundamental that the participants find mutually beneficial arrangements beyond the mandates in order for them to thrive.

In the UK, NatWest has played a leading role in this regard by creating the ‘Bank of APIs’, which is an application programming ecosystem that goes beyond the UK Open Banking mandate and is bringing an increasingly wide variety of the bank’s services to customers and partners in new and convenient ways.

The simple fact of the matter is that advancements in technology - including APIs, data and analytics - are driving the Open Banking and Finance wave, leading to enhanced, real time financial services experiences for both consumers and businesses.

If you’re looking for the talent you need to take your organisation's Open Banking offering to the next level, please get in touch with our expert team: