British Banks Complete Open Banking Roadmap Services
Completion of the Roadmap
British banking providers have completed their Roadmap for Open Banking, announced Open Banking Limited (OBL) on September 9. Confirmed by the U.K.’s Competition and Markets Authority (CMA), this milestone means the nine CMA-mandated banks can now offer a full range of open banking payment and account information services.
Enhanced Financial Control with VRPs
One of the standout achievements in this roadmap includes the implementation of Variable Recurring Payments (VRPs) for sweeping. This feature, now fully integrated by the final banks on the CMA’s list, provides enhanced financial control, smarter payments, and greater flexibility for customers across the United Kingdom. VRPs allow customers to authorize payment providers to manage payments on their behalf within agreed limits, thus streamlining financial management.
This development opens up exciting opportunities for fintechs to partner with these banking providers, fostering innovation in financial services. The introduction of VRPs for sweeping marks a major leap forward, enhancing the overall efficiency of financial transactions and customer experience.
Open Banking Adoption: Rapid Growth
The year 2024 has witnessed a surge in open banking adoption. As of July, there were 11.32 million open banking users in the UK, reflecting a 12% increase from the previous month. During the same period, over 19 million open banking payments were recorded, with VRPs for sweeping contributing 2.45 million of these transactions. This represents a remarkable growth rate of nearly 24% for VRPs.
Consumer Interest vs. Usage Gap
Despite the rapid growth, a recent study by FinRate Intelligence and Trustly reveals a notable gap between consumer interest in open banking and actual usage. The research found that while 46% of American adults expressed strong interest in open bankings payments, only 11% have actively used the service. This discrepancy is largely attributed to limited awareness and security concerns.
However, the study highlights a significant opportunity for growth. Consumers are more likely to engage with open bankings if provided with incentives such as discounts. Integrating these incentives could enhance the appeal of open bankings services and encourage broader adoption.
Rising Satisfaction Among Frequent Users
As awareness and familiarity with open bankings increase, so does user satisfaction. The report notes that 82% of individuals who used open bankings payments more than 15 times in the past year expressed high levels of satisfaction. This positive feedback underscores the potential for further growth and the need for open bankings providers to address existing challenges to tap into the full potential of this evolving financial landscape.