INTERMEDIATE OUTCOMES (ADOPTION)
- We estimate that 10 – 11% of digitally-enabled consumers and small businesses used open banking during March 2022.
- This figure has increased from 6 – 7% in March 2021
- Business penetration (11%) is slightly higher than retail (10%), but the gap between the two has closed significantly since 2021.
- The split between types of usage is 64% data, 30% payments with 6% of customers using both, however business users are more strongly skewed to data.
- In the six months to March 2022, there were 21.1m open banking payments, compared to 6.1m in the same period the prior year. Month-on-month growth is running at around 10%.
Open banking penetration
Using data submitted to the OBIE by the CMA99 we have estimated the penetration of open banking into the total base of digitally-enabled consumers and small businesses. This analysis should be considered directional only. See figure 9.
Figure 9: Estimated penetration of open banking into the broader digitally-enabled population
Recognising the limitations of the underlying data, we estimate that 1 in 10 digitally-enabled end users were using at least one open banking-enabled product or service in March 2022. This figure has increased from in 1 in 13 in September 2021 and from 1 in 16 a year ago in March 2021. We can see a clear spike in the data in January 2022, which we attribute to many new users using open banking payments to make tax payments to HMRC in that month.
Figure 10: Estimated open banking end-user adoption10
"We estimate that 1 in 10 digitally-enabled end users were using at least one open banking-enabled product or service in March 2022. This has increased from in 1 in 16 in March 2021"
Gap between business and retail penetration is closing
For the first time in this report, we can provide estimated penetration by account type, with a number for retail accounts (that is, those typically provided to consumers) and business accounts. This shows that business penetration is slightly higher at around 11%, versus retail penetration at 10%. However, the gap between business and retail penetration has closed significantly since the beginning of 2021. This indicates that many small businesses were early adopters (likely through the roll-out of open banking for cloud accounting), with consumer adoption lagging about one year behind.
Figure 11: Estimated open banking end-user adoption (retail versus business)
Usage for data versus payments
We can also provide estimated splits between use of open banking to provide access to transactions: account information services (AIS) and open banking payment initiation services (PIS). When we look at all users of open banking, 88% are retail customers. This is not surprising as there are significantly more consumers than small businesses in the UK. However, there is a clear difference in usage patterns, with small businesses strongly skewed to AIS usage (accounting for 82% of users, with an additional 6% using both AIS and PIS), versus consumers who are 62% users of AIS (with an additional 6% who are users of both services) and 32% who are PIS users. This is displayed in Figure 12.
Figure 12: Split of active users between retail and business, AIS and PIS (March 2022)
Successful open banking payments
Open banking payments are becoming important for retail customers as large companies and major institutions roll out these options. These include tax payments, charity donations, the settlement of credit card bills and the funding of digital wallets. A total of 21m open banking payments were reported to the OBIE between September 2021 and March 2022 (see figure 13). In March 2022, the number of payments reached 4.5m and the month-on-month growth rate is running at 10%. Although this growth is strong, for comparison, in the most recent month for which data is available, there were 327m faster payments and 1.7bn card transactions11 indicating that today open banking payments represent only 0.2% of UK retail payments.
Figure 13: Number of successful payments
Source: OBIE analysis of CMA9 data submissions.
Note: Successful payments initiated by third party providers using Open Banking API, based on data submitted by account providers (ASPSPs) to open banking. There is no data prior to July 2020. Includes data from nine providers and 19 brands.
9Source: the OBIE estimates based on CMA9 ASPSP submissions, corroborated against BEIS, ONS, Eurostat and UK Finance. Note: This data is based on submissions of active user numbers (active defined as active in the last month) and digitally active end users by the CMA9. It therefore only represents penetration within the CMA9 digital customer bases, although this is a significant share of the UK population. This data has been corroborated against data on the total adults and small businesses currently using internet banking, derived from ONS, Eurostat and UK Finance.
10Source: the OBIE estimates based on CMA9 ASPSP submissions, corroborated against BEIS, ONS, Eurostat and UK Finance. Represents the % of CMA9 digitally-enabled end users with active open banking connections in the previous month. Note: This data is based on submissions of active user numbers and digitally active end users by the CMA9. Active is defined as having been active within the past month. It therefore only represents penetration within the CMA9 digital customer bases, although this is a significant share of the UK population. This data has been corroborated against data on the total adults and small businesses currently using internet banking, derived from ONS, Eurostat and UK Finance.
11Source: Pay.UK (Faster Payments Data, March 2022) and UK Finance (cards data, January 2022).
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