RESULTS

Growth in live to market open banking-enabled products and services

The number of open banking-enabled products and services has grown to 109 as at 31 December 2020, a growth of 76% versus the number at 31 December 2019 (See Figure 1).

Figure 1: Number of live to market open banking-enabled products and services

Direct to end user vs enablers

Analysing the 109 Live to Market open banking-enabled products and services, we can see that the majority are offering Direct to End User services, with a minority operating in an Enabling Role. See Figure 2.

Figure 2: Live to market open banking-enabled products and services

Source: OBIE analysis. 2020. Note: of the 114 live to market products and services, 5 were removed as they formed part of a Group Company which was already included. Using analysis of publicly available information (including participant websites and press articles), the team assessed whether the participant was primarily delivering services direct to end users; or was primarily engaged as an enabler of other firms who are delivering services to end users either through agents or Third Parties not Providing AIS (TPNPAs). For clarity on these definitions, we used the FCA’s descriptions, which can be seen here. Where a participant was pursuing both models (direct to end user and enabler), we used judgement to allocate them to one of the two categories by identifying which was the primary part of its business. Note that it was not possible to allocate Payment Providers to Enablers or Direct to Consumer. In this case the distinction is unhelpful and these were all recorded as ‘Not Applicable’ in this analysis.

Analysis by outcome area

The CEF Framework has identified 6 outcome areas. These are set out in Figure 3 and the numbers recorded are in Figure 4.

Figure 3: Outcome areas

Figure 4: Live to market open banking-enabled products and service, by outcome area

Source: OBIE analysis. 2020. Note: of the 114 live to market open banking-enabled products and services, 5 were removed as they formed part of a Group Company which was already included. The remaining 109 were analysed using publicly available information (including participant websites and press articles). The analysis identified which of categories the primary proposition fell into: the 6 Outcome Areas (see Appendix 1 for full details), Mixed or Other. Whilst many propositions had aspects of a number of outcome areas, for this analysis we focused on the primary objective of the end user proposition. As well as the 6 outcome areas defined in the CEF Methodology, we used two additional tags. Mixed: used where an enabling firm was supporting multiple outcome areas or it was not possible from public domain information to be sure what outcome areas this enabling firm was supporting (either through agents or TPNPAs). For some enabling participants it was possible to identify the outcome area they were enabling (particularly in the Better Borrowing outcome area); in others it was impossible. Other: used for participants who did not fit any of the categories. This was rare, but we identified participants who fell outside the broad definitions in the CEF Methodology. As we progress, we may need to create new categories for these participants. In this analysis we only identified 6 participants who we could not allocate to one of the 6 outcome areas or the Mixed Outcome Area.

The analysis shows that the three most common Outcome Areas are Improved Financial Decision Making, Expanded Payments Choice and Better Borrowing. Together these three Outcome Areas represent 83 of the 109 firms included in the analysis. To date, few firms have come to market with products or services focused on the Switching, Increased Savings and Investments or Access to Advice areas. The majority of firms can be cleanly allocated to one of the six Outcome Areas. Only 6 could not be allocated. These firms are offering:

Round-up services to encourage charitable donations (2)
Identification of vulnerability (1)
Audit services (1)
Account verification (1)
The use of open banking was unclear in the context of a broader proposition (1)

As the CEF evolves it will be important to assess whether these propositions constitute a new Outcome Area or whether the definitions should be updated. It is to be expected and positive that innovation delivers new and unanticipated products and services using open banking.

Analysis by outcome area and end user type

Building on the analysis in Figures 3 and 4, Figure 5 now shows the split between end user type. It can be seen that there is a slight bias towards consumer services (37), but still a significant number of small business orientated services (22). Also notable is the number of providers targeting both communities (47, although a number of these operated in the Mixed area which are primarily enablers rather than direct to end user or in Expanded Payment Choice, where the consumer / SME split is not possible or helpful).

In most areas the availability of products and services was relatively balanced between end user types (e.g., Improved Financial Decision Making, 21 consumer offerings vs 16 Small Business offerings). Increased Savings and Investments however has a strong bias towards consumer offerings (3 vs 1).

Figure 5: Live to market open banking-enabled products and services split by outcome area and primary end user type

Source: OBIE 2020. Note: Based on an analysis of publicly available information, the team defined whether the participant was primarily focused on individual end users or small business end users. For participants that supported both, they were allocated to a Both category. + Note that for providers focused on expanding payments choice, it was not possible or practical to allocate to a consumer or small business end user. The majority of payments providers serve both small businesses (as beneficiaries) and both consumers and small businesses (as PSUs).

Analysis by outcome area over time

There has been strong growth in live to market open banking-enabled products and services generally (Dec 18 to Dec 19 = 288% growth; Dec 19 to Dec 20 = 76% growth). The pattern by Outcome area shows that Improved Financial Decision-Making and Better Borrowing dominated in the first year of open banking. Since then, the range of Outcome areas represented has broadened, with Expanded Payments Choice showing sharp growth in 2019.

Figure 6: Live to market open banking-enabled products and services split by outcome area and primary end user type