Thought Leadership

Open banking – expert predictions for 2023

06 January 2023
Open banking - expert predictions for 2023

In December 2022, the OBIE completed the managed rollout of variable recurring payments (VRPs) for sweeping, marking the final milestone in the Competition and Markets Authority (CMA) Roadmap which brought open banking to life five years ago.

As adoption continues to grow – there are now more than six million active users of open banking-powered apps, products and services – we ask experts from the industry, regulators, and trade associations to explore the opportunities ahead. You can read the complete article here, but here’s a quick summary of their comments:

Janine Hirt, CEO of Innovate Finance, predicts that open banking will continue to transform the payments and lending landscapes and the key role it will play in reducing financial services fraud, while Kate Fitzgerald, Head of Policy at the Payment Systems Regulator, sets out how open banking competition regulation can help users of payments systems, both consumers and businesses.

Nicole Green, VP Product Strategy & Operations at Yapily explains what she thinks will be the game-changing use cases for VRPs for sweeping and non-sweeping.

Helping tackle cost of living challenges

David Fagleman, Advocacy Associate at the Finance Innovation Lab, highlights the role that open banking can play in supporting financially vulnerable consumers and Dr Mike Granleese, Deputy Managing Director, Corporate Reputation at Ipsos UK, explains how open banking data and services can help consumers manage their finances as they face cost-of-living challenges. Independent Consumer Expert Faith Reynolds also highlights how open banking gives providers the opportunity to embed income maximisation tools, to make sure people can quickly access all the support they need.

Business support

Martin McTague, National Chair of the Federation of Small Businesses, believes open banking can support the UK’s SMEs in staying on top of their finances and accessing useful business insights to improve their forecasting.

Simon Cureton, CEO of Funding Options, expects open banking to become a requirement for any form of consumer or SME debt finance, as it offers near real-time transparency of the borrower’s financial position. This can help individuals and businesses to make more informed decisions prior to applying for finance.

Open finance

Looking ahead to open finance, Kevin Floyd, Product Owner Open Banking Channels at Lloyds Banking Group, lists some of the expanded opportunities it offers, these being:

  • Financial inclusion for underserved communities.
  • Lower costs and fees.
  • Greater consumer choice.
  • Security.

In terms of data, Ghela Boskovich, Head of Europe at FDATA, believes the demand for services that help customers better manage their money in a recession means service providers will want access to more than just payment data, and so savings and lending data will become increasingly important.

This is echoed by Nilixa Devlukia, Chair of the Open Finance Association, who explains that open finance presents an opportunity for consumers and businesses to gain control and visibility of all aspects of their financial lives – savings accounts, investments, loans, pensions, and mortgages.

Looking to the future

In conclusion, OBIE Chair and Trustee Charlotte Crosswell pays tribute to the CMA9, fintechs, regulators, policymakers and other key stakeholders in the open banking ecosystem which have collaborated to successfully deliver this world-leading open banking framework.

Charlotte goes on to highlight that the UK’s position as a global leader in the open banking sector represents a real opportunity for future digital trade and for the UK to share the expertise that made the implementation of our trusted open banking framework so successful.