Open banking usage in the UK are booming. The Open Banking Implementation Entity (OBIE), the body set up by the Competition and Markets Authority (CMA) to deliver open banking in the UK, has today announced that over two million customers are now using open banking-enabled products.
OBIE announced they have reached a 1 million users back in January 2020. Just after ten months, one more million individuals and small businesses joined the crowd and took advantage of using open banking services. There has been a steady increase at a rate of around 160,000 users per month, which only plateaued in April and May when lockdown measures in the UK were introduced, before the strong growth resumed. This also represents a significant upswing in the use of the innovative banking technology despite the disruptive effects of the Covid-19 pandemic.
Nesta Challenges’ Open Up 2020 Challenge, shows a sharp increase in the use of money management apps during the pandemic, of which 45 per cent were 25-34-year-olds. According to the survey of 2,000 UK adults in early July 2020, one in five started using online banking apps during lockdown and 54 per cent now use them regularly. We can clearly say that Covid-19 helped a adoption of digital money management platforms.
Open banking can be used in multiple ways to help users access their banking data and better manage their finances. Examples of this include:
Multi account visibility: Personal financial management apps aggregate bank account information, which in turn gives customers spending analysis and support in setting saving goals
Access to credit: Giving banks and credit providers access to banking transaction data enables them to make more informed lending decisions, opening a much wider range of borrowing solutions and potential better lending rates for the customer.
Debt management: Open Banking allows a customer to provide an immediate and accurate view of their debt picture to a debt advice platform This enables customers to get the best support when they have a debt management problem.
Applying for mortgages: Unlocking your financial data both simplifies and speeds-up the mortgage application process without the need to send physical bank statements.
All data provided by Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, RBS Group and Santander.
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