Open banking in the UK: An in-depth analysis of its evolution, impact, and future directions

by Lasma Kuhtarska, co-founder & chief strategy officer, Noda

Share this post

The United Kingdom stands at the forefront of the open banking revolution, reshaping the financial sector with innovative regulatory frameworks and empowering businesses and consumers with unprecedented financial transparency and control. 

The genesis and evolution of open banking in the UK 

Open banking in the UK was spurred by a broader European initiative to increase financial transparency and consumer empowerment. This movement gained formal traction in 2017 by enacting the Payment Services Regulations (PSRs), which incorporated the revised Payment Services Directive (PSD2) into UK law. This legislation marked the commencement of open banking by mandating the nine largest banks in the UK, known collectively as the ‘CMA9,’ along with other financial institutions, to adopt open APIs. This was aimed at fostering a competitive environment and facilitating secure data access to authorized third-party providers (TPPs). 

These institutions established the Open Banking Implementation Entity (OBIE) to create and promote a standardized framework for easy and secure account access, enhancing competition and innovation within the financial services sector. 

Regulatory framework and standards 

The Financial Conduct Authority (FCA) oversees the UK’s open banking framework, ensuring compliance among banks, building societies, and TPPs. The OBIE has set forth the Open Banking Standard, which encompasses: 

  • Technical specifications: Including detailed documentation for read/write API, open data API, and others. 
  • Security profiles: Developed with the Open ID Foundation to ensure secure data exchanges. 
  • Customer experience guidelines: Based on regulatory requirements and customer feedback to enhance user interactions. 
  • Operational guidelines: Assisting providers in maintaining high-performance interfaces and regulatory compliance. 
  • Certification service: Allowing providers to demonstrate adherence to standards, facilitating exemptions from certain regulatory requirements. 

Current trends and adoption 

As of mid-2022, open banking has seen a dramatic increase in adoption across the UK. Over 3 million individuals and businesses now use services enabled by open banking—a significant rise from just 1 million in early 2020. The services under open banking have also expanded, ranging from consolidated financial views (AIS) to streamlined payment solutions (PIS). 

The impact on small businesses has been particularly notable: 

  • 75% report improved decision-making capabilities. 
  • 82% have seen enhanced business efficiency. 
  • Nearly half have experienced reduced internal and external costs. 
  • 70% have effectively managed late payments and pursued unpaid invoices. 

Consumer adoption is also on the rise, with active use among digitally-enabled consumers growing steadily. 

The road ahead for open banking in the UK 

Lasma Kuhtarska, co-founder & chief strategy officer at Noda

The future of open banking in the UK is promising, filled with opportunities to revolutionise financial services further. The Strategic Working Group’s report on open banking underscores the importance of evolving standards to align with market trends and user needs, emphasizing the prevention of market fragmentation. 

Broad adoption across all UK banks and consistent application of the standards are seen as crucial for sustaining the ecosystem’s health and fostering global competitiveness. Projections indicate that open banking transactions will witness substantial growth, potentially increasing from $57 billion in 2023 to $330 billion by 2027. 

Reflecting on the journey and future of open banking, a Noda representative highlights: “Open banking has set the stage for a financial services renaissance in the UK. At Noda, we leverage this framework to deliver seamless, secure financial transactions and analytics across platforms. As the market evolves, our commitment is to stay at the forefront, enabling businesses and consumers to maximise the benefits of open banking.”  

Open banking has transformed the UK’s financial landscape, providing greater control over financial data and catalysing fintech innovation. The journey is ongoing, and as the ecosystem matures, it will be essential to maintain alignment with global standards, ensure the security and reliability of platforms, and deliver consistent value to all societal sectors, including the most vulnerable. The future of open banking in the UK, characterized by robust growth and innovative potential, looks unequivocally bright. 


Article by Noda

More To Explore


Are you a member of The Payments Association?

Member benefits include free tickets, discounts to more tickets, elevated brand visibility and more. Sign in to book tickets and find out more.


Log in to access complimentary passes or discounts and access exclusive content as part of your membership. An auto-login link will be sent directly to your email.

Having trouble signing?

We use an auto-login link to ensure optimum security for your members hub. Simply enter your professional work e-mail address into the input area and you’ll receive a link to directly access your account.

First things first

Have you set up your Member account yet? If not, click here to do so.

Still not receiving your auto-login link?

Instead of using passwords, we e-mail you a link to log in to the site. This allows us to automatically verify you and apply member benefits based on your e-mail domain name.

Please click the button below which relates to the issue you’re having.

I didn't receive an e-mail

Tip: Check your spam

Sometimes our e-mails end up in spam. Make sure to check your spam folder for e-mails from The Payments Association

Tip: Check “other” tabs

Most modern e-mail clients now separate e-mails into different tabs. For example, Outlook has an “Other” tab, and Gmail has tabs for different types of e-mails, such as promotional.

Tip: Click the link within 60 minutes

For security reasons the link will expire after 60 minutes. Try submitting the login form again and wait a few seconds for the e-mail to arrive.

Tip: Only click once

The link will only work one time – once it’s been clicked, the link won’t log you in again. Instead, you’ll need to go back to the login screen and generate a new link.

Tip: Delete old login e-mails

Make sure you’re clicking the link on the most recent e-mail that’s been sent to you. We recommend deleting the e-mail once you’ve clicked the link.

Tip: Check your security policies

Some security systems will automatically click on links in e-mails to check for phishing, malware, viruses and other malicious threats. If these have been clicked, it won’t work when you try to click on the link.

Need to change your e-mail address?

For security reasons, e-mail address changes can only be complete by your Member Engagement Manager. Please contact the team directly for further help.

Still got a question?