Open banking in the UK is eight years old and has become an established part of the financial services sector, but its next phase will see it help create services beyond retail banking.
Following the Competition and Markets Authority’s Retail Banking Market Investigation Order in 2017, UK banks were required to implement open banking regulations, which led to the development of application programming interfaces (APIs) to give consumers more control over their bank accounts.
It enables them to share their banking details with third-party apps and websites, through the APIs, if they choose to. This makes using services easier for consumers and enables faster application for services.
The end goal was to increase competition in a retail banking sector dominated by big financial services companies. Customer banking data is shared by the industry through APIs, with customer permission, enabling businesses to offer tailored products. For example, payments could be initiated by third-party suppliers and account information viewed via them, or both. This would mean a third party could build services on top of an account and allow the customer to use these rather than those offered by the bank.
Open finance, as open banking’s next phase is often described, will see firms share banking data across more services, such as mortgages and loans, also via APIs, and offer products and services from external organisations.
Consumers and small and medium-sized enterprises could receive services that are appropriate to them based on their real financial requirements, and applying for them will be less laborious.
According to figures from Open Banking Limited (OBL), to date, in its eight years of existence in the UK, open banking has gained 16.5 million live user connections, and about 33 million open banking payments were made in a single month (November 2025).
OBL said the tech-enabled services have contributed £4bn to the UK economy and almost 5,000 skilled tech jobs.
Henk van Hulle, CEO of OBL, said: “In just eight years, OBL has helped build an ecosystem that people and businesses across the UK now use as part of everyday financial life, sometimes without even realising.
“The UK has created something genuinely world-leading; the priority now is to put the right long-term structures in place so that advantage is protected and can continue to grow to support as many businesses and consumers as possible to better engage with, and make the most of, their finances.”
The OBL said: “The announcement also shows how the standards and infrastructure developed through open banking will underpin the UK’s next move towards open finance and smart data following the Data (Use and Access) Act 2025, with real-world use cases already emerging across areas such as mortgages and energy switching.”
It said the challenge is expanding the use of the open banking model into other sectors. “Secure data sharing has the potential to unlock innovation well beyond retail banking, supporting new services across areas such as pensions, investments, insurance, energy, telecoms and housing,” said the OBL.
“The real cross-sector value is already emerging; mortgages that recognise current account history; energy switching that reflects real payments behaviour – these are verified attributes that travel with the user.”
Teething troubles
Chris Skinner, fintech industry expert and CEO at The Finanser, said open finance, the wider definition of open banking, is “a bit of a miss and hit affair”.
“Some of the things that we have seen through the open banking forums have proven that this can work,” he said. “But there are also still teething troubles between different providers, particularly when a part of the systems goes down.”
Skinner said companies providing excellence in delivering this include digital challenger banks Revolut, Monzo and Starling.
“Traditional financial firms find it much more difficult to deal with these changes because they do not have the appropriate back office systems to deal with them,” he said. “This is why finance has played nicely into the fintech world of changing the traditional ways of doing financial services and delivering a great user experience.”
