Open Banking One Year On - The Paper(less) Anniversary

07 February 2019


Just over one year ago, the Revised Payment Service Directive (“PSD2”) came into effect in the UK through the nationwide initiative introduced by the Competitions and Market Authority (the “CMA”), known as “Open Banking”. Open Banking gives customers the right to use an authorised third party to access account data and make payments on their behalf and operates to regulate these authorised third parties and services in a manner similar to existing banks and financial institutions.

Open Banking was introduced in January 2018 with relatively little fanfare for what was considered a major impetus for innovation in the banking market. Even at the time of launch, commentators were largely in agreement that consequences of its implementation would be revolutionary but were as yet unknown. One year on, it is irrefutable that Open Banking has changed the way some of us bank - even if that change is not as visible as some industry experts may have hoped.

Consumers like you and me may have noticed additional features within our personal banking apps, such as the option to “Add Bank”. If so, it is also striking that the options to add another bank’s accounts to a personal banking app are limited – sometimes to just one bank. However the slow (but steady) modifications to personal banking services are not reflective of overall growth. At the beginning of 2019, there were sixty-five “Payment Service Providers” (broadly defined as an entity that makes electronic payments on behalf of its customers) registered to provide Open Banking services and, between May 2018 and November 2018, over forty-five million Application Programming Interface (“API”) requests were made by consumers to the nine principal UK banks and associated brands.

As well as Payment Service Providers and consumers, certain banks embraced Open Banking in 2018. HSBC became the first of the major UK banks to release a standalone app giving users a global view of all of their accounts last June and, in September, Barclays released an update to its mobile banking app allowing customers to view accounts from other banks.

Some commentators have found the perceived lack of impact disappointing, with a sceptical or indifferent public being cited as a principal factor.It has been noted that deeply-rooted consumer behaviour will not transform overnight and that banks must proactively tackle their concerns. Tom Renwick, strategy analyst at challenger bank Atom, has commented that "The promise of open banking will only be realised when there are fintechs and banks alike producing innovative products and services leveraging APIs that seek to address real customer needs." (

The launch of PSD2 in the UK continues to be watched with interest all over Europe as other markets prepare for implementation of the directive. On the anniversary of the implementation of Open Banking, some are hailing 2019 as a decisive year.It is predicted that, this year, banks will shift focus beyond consumers and turn their attention to developing Open Banking services for commercial customers. At this point in time, the Open Banking infrastructure itself has matured and it is anticipated that the majority of teething problems have been addressed.

At the start of this week, HSBC and Goldman Sachs were revealed as amongst investors in a twenty million dollar funding round for UK banking technology start-up “Bud”, which will apply the investment toward creating the world's largest team dedicated to the development of Open Banking technology (

Perhaps the future of Open Banking lies in more of these fintech and bank pairings.Regardless, what is beyond doubt is that Open Banking has a lot more to offer both consumers and the market and 2019 could be the year that it ignites with a bang.

You can find out more about Open Banking at