- As of March 2022, there were 128 fully regulated firms with live-to-market open banking-enabled products and services.
- This figure has remained static since September 2021, with 1 new proposition coming to market and 1 firm withdrawing. The original growth in regulated TPPs seen up to March 2021 has now plateaued.
- The fully regulated market remains dominated by propositions addressing improved financial decision-making (40), expanded payments choice (31) and better borrowing (23).
- For the first time we are including new data on the availability of products and services offered by agents of regulated TPPs. There were 142 such firms with live-to-market services at the end of March 2022.
- Most agent propositions are clustered around improved financial decision-making (56), expanded payments choice (26) and better borrowing (25), However, this market sector is highly innovative with unique propositions to meet specific market needs,
- Overall, our six outcome areas continue to cover most propositions in the market. We now have 15 participants that fall outside these categories and will continue to monitor this carefully.
Availability analysis – regulated TPPs in the Open Banking Directory
There has been no overall increase in TPPs offering open banking-enabled services in the six months to the end March of 2021. The number of live-to-market TPPs has remained at 128 since September 2021, with one firm entering and one leaving. We have segmented these TPPs by the type of service they offer, using the six outcome areas identified in the Customer Evaluation Framework (figures 2 and 3). We provide full descriptions of the agreed outcome areas, including examples of propositions allocated to each category, in Appendix 2.
Figure 2: Live-to-market open banking-enabled services, by principal outcome area
Source: OBIE analysis, 2022. Includes live-to-market entities regulated as TPPs only. See explanatory note after Figure 4
Figure 3: Live-to-market open banking-enabled products and services, over time by type of customer
Figure 4: Live-to-market open banking-enabled products and services, over time by route to market
Figure 4: Live to market open banking-enabled products and services, by outcome area
See notes below5.
Growth of regulated TPPs has plateaued
In the early roll-out phase we saw strong growth in services (year to March 2020 = 319% growth; year to March 2021 = 34% growth). However, it appears that this growth has now plateaued and the number of active TPPs has remained largely static. In the year to end March 2022, six TPPs came to market, while four exited, a net increase of two. In the past six months, there was one leaver and one joiner.
Key outcome areas
Consistently, the three most common outcome areas remain:
Improved financial decision-making
Expanded payments choice
Together these three areas represent 94 of the 128 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.
Switching was originally conceived as the provision of personalised switching services to help consumers and small businesses choose the correct current account for their needs. We see no such services to date, however there are other services focused on helping consumers switch or get better value from other products. We may see more of these services as the ecosystem expands to open finance.
Savings and investments remains an area with limited availability, although as Impact Report 2 demonstrated, there are a few highly valued services in this space. We hope the implementation of variable recurring payments (VRPs) for sweeping later in 2022 will encourage the growth of more savings services using open banking.
Access to advice is the final outcome area with limited availability. We are aware of several pilots in this space, but it is likely that many of these operators are working either as agents or as other parties (see figure 5 for an overview of these alternative regulatory models). Most firms can be clearly allocated to one of the six outcome areas. Only six 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)
- Open banking as a small component in a private banking proposition (1).
We expect to see innovative new and unanticipated products and services using open banking. We will monitor whether there are sufficient uncategorised propositions to create new or revised outcome areas, or whether the definitions should be updated. The analysis of the primary target audience demonstrates that most providers are targeting both consumers and small businesses (44%), whereas 35% focus exclusively on consumers, and 21% focus on small businesses only. There has been no significant change in the composition over the past year.
Availability analysis – agents of regulated TPPs
A key objective of the Impact Report is to better understand the number and range of organisations using open banking data. In previous reports we have limited our analysis to regulated TPPs live in the Open Banking Directory. We note that this metric, which only includes providers which are regulated actors, provides a partial picture.
To help demonstrate the value of open banking to the UK economy and society, it is important that we show the availability and diversity of the full open banking ecosystem. This is vital as there is good evidence that new open banking service providers are increasingly choosing to utilise the services of platform Account Information Service Providers (AISPs) which provide data to other parties, rather than become regulated under the Payment Services Regulations (PSRs)6 themselves. There are cost and time to market advantages of these alternative approaches. See figure 5 for a summary of these options.
Figure 5: Three high-level options for launching a service using open banking data
In this report we include new data on the second of these categories - agents of regulated TPPs - but we are not yet able to provide insights or analysis of other parties.7
Figure 6: Agents of regulated TPPs offering open banking-enabled products and services split by outcome area
Figure 7: Agents of regulated TPPs offering open banking-enabled products and services split by primary end-user type
Propositions offered by agents
Our analysis identified 142 agents of AISPs with live-to-market propositions. As with the propositions offered by directly regulated TPPs, the three most common outcome areas are:
Improved financial decision-making
Expanded payments choice
However, there are also a significant number of propositions in the increased access to advice and guidance outcome area (13), including propositions that aim to produce insights on the environmental impact of financial behaviour, or to help users shop with accredited ethical businesses.
The agent market is an innovative part of the ecosystem, with small firms developing unique propositions for specific market needs that fall outside the current outcome areas. Interesting examples are:
An app to arrange and pay for childminding services.
an automated solution that facilitates automated shared expense approvals for clubs and associations.
An investment planning tool for independent financial advisers (IFAs).
A cross-border personal finance platform.
An ‘attention exchange’ digital advertising disrupter, which helps businesses to target their advertising forensically. The audience and brands are matched by open banking data.
Lets users view and track multiple bank accounts and credit cards and lifestyle-related carbon footprint, including automated budgeting and planning tools to reduce and offset personal carbon footprint.
A tool to allow gambling providers to undertake affordability/vulnerability checks on customers.
Automated digital identity verification for use by solicitors for customer onboarding. It meets Law Society AML/verification requirements.
Scratch the Surface
An app that helps customers shop with accredited ethical businesses that provides insights on spending.
"New open banking service providers are increasingly choosing to utilise the services of platform AISPs which provide data to other parties, rather than become regulated under the Payment System Regulations themselves"
Opportunities for innovative new services
These alternative regulatory routes to market are providing an incubator-like vehicle for firms to bring innovative and differentiated services to market. We will continue to monitor the growth of agents in future reports to evaluate if this is a continuing trend. Although there are significant challenges in gathering this data, we will also work with platform AISPs to understand the number and type of other parties operating in the market. Unfortunately, we can’t accurately size the availability of ‘other parties’. We have, however, illustrated how the market could be structured in figure 8 below.
Figure 8: Illustrative composition of open banking ecosystem structure
Availability – conclusions
This analysis shows that the availability of services by regulated TPPs has plateaued since the last report and remains at 128. It appears, however, that the agent market continues to expand, with 142 live-to-market agent services8. The structure of the market is also evolving: we are seeing a growing trend towards a smaller number of platform AISPs supporting a large number of other parties providing services to end-users, either as agents or other parties.
5Note: this analysis differentiates between AISPs who are offering services direct to customer, versus those who are primarily enablers of other propositions. These are effectively ‘platform AISPs’. This distinction isn’t helpful in payments propositions as a PISP will in many cases be enabling a merchant to accept open banking payments, as well as offering that service direct to customers. We therefore report payments providers separately.
Methodology notes for availability analysis Firms included: this analysis is based on data collected by OBIE on the number of TPPs who are regulated, active in the Sandbox or Production and who have a live-to-market service. In analysis, eight were removed as they formed part of a group company to avoid double counting. Allocation to outcome area: The 128 entities were analysed using publicly available information (including participant websites and press articles). The analysis identified which of the six outcome areas the primary proposition fell into (see Appendix 1 for full details of the six outcome areas). Mixed and other: As well as the six outcome areas defined in the Framework Methodology, we used two additional tags. ‘Mixed’ was used where an enabling firm was supporting multiple outcome areas. ‘Other’ was used for participants who did not fit any of the categories. This was rare (six participants). As the Impact Report progresses, we may need to create new categories for these participants.
6Payment Services Regulation, 2017
7As agreements between platform AISPs and other parties are commercially sensitive and not published or reported, there is no market data on the number or types of services in market using open banking data under this model. In contrast, both TPPs and agents of AISPs are recorded in the FCA Register. We have gathered some data from selected platform AISPs, which gives us anecdotal insights into the number and types of ‘other parties’ with services in market using open banking data. However, we are not yet in a position where we can publish insights into the number or type of such services. We hope to work with the platform AISPs in the market to gather data for the next reporting cycle as this remains a key gap in the availability analysis: for example, many lenders, letting agents, gambling companies and even debt advice providers are likely to be operating as ‘other parties’ and are therefore excluded from our analysis.
8This is the first time this analysis has been completed and we do not have time series data at this stage. However, many of the agent propositions we analysed were new, leading us to conclude that this part of the market is likely to have grown.
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