Published: July 31, 2026
While the number of Open Banking transactions continues to grow, the industry feels that progress is stalling. Will the FCA’s vision of a smart data future become a reality at speed and generate some crucial momentum?
Open Banking in the UK is now well into its eighth year. Once little more than a regulatory initiative, aimed at increasing competition in the retail banking sector, Open Banking has grown to become a cornerstone of the UK’s financial landscape.
In simple terms, Open Banking enables consumers to share their banking details (securely and consensually) with third party apps and websites. This simplifies their payments process, as well as opening them up to a wealth of new services. From a business perspective, the rise of Open Banking brings scope for ever greater innovation and more streamlined processes internally.
“Open banking creates an opportunity for other companies to innovate on top of banking infrastructure,” Ben Goldin, CEO and co-founder of Plumery, tells EMEA Finance. “Banks have figured out how to create robust and compliant infrastructure that is also fundamentally slow. But the companies who can leverage open banking APIs and build on top have great velocity.”
It also means that the UK’s ‘Big Nine’, who are the nine largest UK banks, as determined by the Competition and Markets Authority, no longer have such a stronghold over the market. Back in 2016, when the Open Banking rules were first laid out, over 90% of the UK’s current accounts were held with these banks. Today, third-party providers are better placed to steal a march on the competition.
As Paul O’Sullivan, global head of banking and lending at Aryza, tells EMEA Finance, consumers now have greater control over their financial data than ever before, enabling them to share it securely and foster greater transparency and trust.
“Through Open Banking, customers can make more informed choices, gain better insights into their finances, and enjoy a more seamless experience,” he says. “The industry also benefits from a more accurate understanding of its customers' needs and behaviours, allowing providers to focus on customer-centric innovations.”
It's appealing proposition, and viewed through one lens, Open Banking has gone from strength to strength. According to Open Banking Limited (OBL), there are now around 16.5 million users across the UK, a figure that has roughly doubled over the past two years. In December alone, users made more than 34 million payments with third party providers.
Meanwhile, the third-party ecosystem is thriving. The Startup Coalition has identified 214 startups operating in Smart-Data-enabled markets, collectively valued at £5.4bn.
A period of stagnation
All this said, it would be misleading to frame Open Banking as an unequivocal success story for the UK. According to Clare Ambrosino, co-founder of the new industry-led organisation Smart Data Group, it would be more accurate to say that the UK had a period of genuine global leadership, followed by a period of relative stagnation.
“Eight years ago, the UK was unquestionably world leading,” she tells EMEA Finance. “Other jurisdictions copied the UK model because it combined regulatory clarity, a centralised implementation body, and strong industry collaboration. That early success helped establish the UK as a fintech hub.”
She notes that progress has slowed since around 2022. While the UK still has enormous strengths, and has largely maintained what it has built, other markets have started to catch up and go beyond.
“Brazil, India, the UAE and parts of Asia have been expanding their frameworks, moving faster into Open Finance, and treating data-sharing infrastructure as a strategic national capability,” says Ambrosino. “What the UK has been missing is momentum, evolution and a clear institutional home, with the mandate and incentives to take Open Banking forward.”
The big risk at this stage, then, is not so much failure as drift. If nothing is done, the UK stands to fall further behind international peers while clinging to outdated regulatory structures. After all, the existing Open Banking guidelines were crafted in a very different time.
For instance, many consumers and businesses have started using variable recurring payments (VRPs), which allow them to set up flexible payments tailored to their needs. VRPs now account for one in six of all Open Banking transactions, and that figure is poised to rise. But the existing regulations contain no guidance on how to scale them.
“Existing regulatory frameworks were mainly designed for the early stages of Open Banking, not for its widespread, mainstream adoption,” points out O’Sullivan. “Calls for new regulatory arrangements reflect the UK’s commitment to supporting a sustainable Open Banking ecosystem that encourages competition, innovation, and growth.”
Fit for the smart data future
The UK is therefore transitioning to a Future Entity, an industry body that will replace the existing regulatory body, Open Banking Limited (OBL). An independent, neutral organisation, it will act in the interests of the whole market, while providing a permanent home for standards and oversight. It will also aim to create a new burst of momentum.
“Open Banking Limited has played an important role in keeping the system running. But it was created to deliver a time-limited competition remedy, not to act as a long-term strategic institution,” says Ambrosino. “The Future Entity is about moving Open Banking from a holding pattern into growth mode. It will provide a clean, independent delivery model that can move faster, cost less, and evolve with the market.”
The process is now moving to the next phase after the publication by the UK’s Financial Conduct Authority (FCA) of its Open finance roadmap: our vision for a smart data future in April. The regulator now wants to move quickly into the ‘design and coordination’ phase and views the roadmap as setting ‘out a clear and ambitious path to turn that potential into delivery, from now until 2030’.
In July, HM Treasury and the UK Chancellor confirmed that Open Banking Limited will lead the next phase of this transaction. According to a press release issued by OBI, the design of the Future Entity “will be industry-owned, with OBL providing neutral, transparent facilitation – while all decision-making authority sits with industry participants”. The firm has presented an design process that will be inclusive, proportionate and transparent with an end goal that the Future Entity will replace OBL as the primary permanent body for manging UK opening banking API standards, and the FCA will retain its regulatory oversight.
Further down the line, the goal would be to move beyond talking about Open Banking as a standalone project. Instead, Ambrosino envisages a world in which Open Banking is just one facet of a mature Open Finance ecosystem.
“This would operate within a broader Smart Data framework, where trusted data sharing works seamlessly across sectors, where the UK is once again cited internationally as the model for how to do this well,” she says.
In other words, Open Banking would be expanded into other sectors, such as pensions, investments, insurance, energy, telecoms and housing. It would mean you could take out a mortgage that recognised your current account history, or switch to a utilities provider that offered you a better deal based on your usage.
Although this is not yet a reality, the groundwork is in place. All being well, Open Banking will have evolved far beyond its present state in another eight years’ time. As Ambrosino puts it: “There is now broad consensus across industry that this is the moment for a fresh start.”