With the full seven years gone since PSD2 was implemented, open banking is now fully assimilated into the UK financial market. With 11.7 million active users and 22.1 million monthly open banking payments, 2025 is likely to see it reach an inflection point of adoption and development toward open finance.
Further legislation, including the Data Bill, will put open banking on proper, sustainable footing. Perhaps with it tees up the basis whereby an interoperable, intelligent, data-driven economy can realise some serious and significant dividends a decade or longer.
Open banking has enabled 400 million successful payments since 2018 and empowered individuals and businesses in a secure and efficient way toward control of their financial lives. Further growth points to open banking playing its part in driving innovative finance and further economic growth across the UK economy.
This entire regulatory environment has, however, put fintech companies under the scanner to optimally manage back-office operations and meet the increasing demands of customers. How such a challenge can be addressed lies in integrating white label payment solution that are robust out-of-the-box infrastructures designed for frictionless financial transactions.
Legislative Drivers
This development chimes with the Government’s ambition for open banking to grow into open finance through the Data Bill, currently working its way through Parliament. In turn, clarity on the long-term regulatory regime should place open banking on sustainable commercial footing, enabling innovation across the wider financial ecosystem to flourish.
As of this writing, investments, insurance, pensions, the next generation will be to go beyond just finance to include those and all sorts of services within open finance. Such will no doubt disrupt how financial services currently exist today and then slowly seep outwards towards further vertical industries, where integration and value generated because of data make economic sense.
Private Sector Collaboration is a Key
While regulatory frameworks perhaps build a roadmap to where the future of open banking should head, collaboration in that respect needs to come from the private sector for mainstream adoption. The path to mass-market adoption includes developing pay-by-bank solutions, expanding VRPs, and a single brand identity for open banking. Driving these initiatives mentioned will require immense effort to innovate and scale in white-label payment gateways, among others, that truly enable the Fintech firms to catalyse those efforts.
The Way Forward
As 2025 gains full steam, the UK leads the charge in this shift from open banking to open finance across the world, affording more opportunity for both consumers and businesses. With strategic partnerships and technological advancement, the UK is well on its way to solidifying its position as a leading nation in fintech innovation.