This time last year the Revised Payment Service Directive (PSD2) came into effect in the UK. This gives customers the legal right to use an authorised third party to access account data and make payments on their behalf. This regime also regulates these entities and services in a manner similar to established banks and financial institutions.

The Competition and Markets Authority (CMA)'s Retail Banking Market Investigation Order mandated the major UK retail financial institutions to develop and implement open API standards for current accounts, giving the UK a solid platform to begin implementing PSD2 services. In fact, there are now 65 authorised Payment Service Providers (PSPs) registered to provide services utilising this platform. Of these, 46 are understood to have launched live products in the market, with banks also launching their own Open Banking services in tandem.

Together, they have used the specifications to build apps which enable consumers to access their account data and allow for payments to be made. Between May and November 2018 over 45 million API requests were made to the nine UK banks and their associated brands that have helped build this digital ecosystem. These requests have shown a steady growth in volume, rising from 1.1 million requests in May to a healthy 17.5 million requests in November.

While firm customer statistics can be hard to come by, the largest use case of these new standards is currently likely to be through the provision of account transaction information. This is when a third-party provider may request account information on behalf of their customers. It is estimated that between 150,000 and 600,000 UK consumers could be using these services today.

Many commentators consider that 2019 will be a critical year. The Open Banking infrastructure will mature and firms will be registering in greater numbers. The Financial Conduct Authority (FCA) has already listed 84 firms which have met their requirements to launch this sort of service, most of which have not yet launched their services publicly.

It is not yet clear what new services will emerge and how customers will respond to them. Account aggregation, budget planning and quicker credit checks have been in the market for some time. However, the availability of these services, and the ease by which a company can integrate them together in a way that is safe, secure and helpful to the customer, is likely to provide the key to unlocking all that Open Banking has to offer.

An app that can check your financial situation across multiple accounts, recommend a way to reorganise your accounts, consolidate your debts and do the heavy lifting on a new credit or loan application; all the while making sure you pay all the bills you need to pay on time?

Well that would be something to shout about.

Related Event

Retail Banking Conference ? 13 March

Imran Gulamhuseinwala, Implementation Trustee, Open Banking is a guest panellist at the upcoming Retail Banking Conference where we will explore the developing landscape of personal finance in 2019. This years? conference will focus on 'the digital future of personal finance? where we will look ahead to an increasingly digitised environment, consider the threat of financial crime, and hear from consumer advocates how these changes might take effect across all parts of society. Read More.

View our other member events here.