OUTPUTS (AVAILABILITY)

Headlines

As of December 2022, there were 159 fully regulated firms with live-to-market open banking-enabled products and services.
This figure has remained broadly flat since March 2022, with three new services launching and five exiting the market. Reasons for exit include acquisition, and services leaving the market.
The fully regulated market remains dominated by propositions addressing improved financial decision-making (49), expanded payments choice (45) and better borrowing (27).
The availability of products and services offered by agents of regulated TPPs has increased by 33 since the end of March 2022. There were 173 such firms with live-to-market services at the end of 2022.
Most agent propositions are clustered around improved financial decision-making (68), expanded payments choice (29) and better borrowing (32). 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 20 participants that fall outside these categories and will continue to monitor this carefully.

Availability analysis – regulated TPPs in the Open Banking Directory

In this edition of the report, 159 TPPs were identified as being live to market in December 2022, two fewer than in March 2022. There were three new additions and five exiting.

Of the five exits, two exited the market completely, two were acquired, and one removed the open banking component of its proposition.

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

See notes below3.

3Note: this analysis differentiates between AISPs which are offering services direct to customer, versus those which 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 which are regulated, active in the Sandbox or Production and which have a live-to-market service. Any double counting has been stripped out.

Allocation to outcome area: The 162 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).

Growth of regulated TPPs has plateaued

In the early roll-out phase we saw strong growth in services:

Year to September 2020

GROWTH

Year to September 2021

GROWTH

Year to December 2022

GROWTH

It is clear that this growth has now plateaued and the number of active TPPs has remained largely static, although with some churn. Since March 2022, there has been an overall reduction of two TPPs.

Key outcome areas

Consistently, the three most common outcome areas remain:

Improved financial decision-making

31%

Expanded payments choice

28%

Better borrowing

17%.

Together these three areas represent 121 of the 159 firms included in the analysis. To date, few firms have come to market with products or services focused on the switching (three) or access to advice (five) areas. We now have eight live services focusing on increasing savings and investments.

Most firms can be clearly allocated to one of the six outcome areas. Only seven could not be allocated. These firms are offering:

Identity services (one)
Charity round-ups (one)
Audit services (one)
Account verification (one)
Support with tax calculations (one)
Open banking as a small component in a private banking proposition (two).

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 (48%), whereas 30% focus exclusively on consumers, and 22% focus on small businesses only. There has been no significant change in the composition over the past year.

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 (8 participants). As the Impact Report progresses, we may need to create new categories for these participants.

Data on live to market firms is collected by the OBIE Participant Support team. It is relatively common for new live-to-market firms to be identified, which have already been live-to-market for a period of time. In such situations the newly identified firm is retrospectively added to the previous totals. This explains why the total for previous periods has changed: for example, in March 2022 the total number of live-to-market TPPs was 128. This has now been restated to 162, as an additional 34 TPPs which were live in March 2022 have subsequently been identified and retrospectively added.

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.

Diverse ecosystem

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)4 themselves. There are cost and time to market advantages of these alternative approaches. See figure 5 for a summary of these options.

4 Payment Services Regulations, 2017

"New open banking service providers are utilising the services of platform Account Information Service Providers which provide data to other parties, rather than become regulated themselves."

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 parties5

5As 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.

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

This component of the market is highly dynamic, providing an incubator-like vehicle for firms to bring innovative and differentiated services to market. Overall, the number of firms acting as agents increased by 31 between March and December 2022. We break down the categories in Figure 8.

Figure 8: Changes in agents of regulated TPPs offering open banking-enabled products between March and December 2022

Propositions offered by agents

Our analysis identified 172 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

39%

Expanded payments choice

17%

Better borrowing

19%

However, there is 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.

Unique propositions

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 of new propositions that have come to market since March 2022 include:

ABAKA

Uses artificial financial intelligence solutions to enable financial institutions to deliver intelligent behavioural nudges, and conversational AI on retirement, savings and investments to its retail and wealth customers. It also offers a digital financial dashboard and an account consolidation service using open banking.

CIRCA5000

Uses open banking to access bank account information on the value of purchases, rounding up transactions to invest the spare change from the purchases to make investments.

Claro Money

A subscription service that allows customers to control their finances by tracking spending and setting goals, as well as providing access to an expert financial coach. It uses open banking to access bank information, providing a linked overview of spending by category or merchant each month.

Joinmyworld

An app that uses purchase and movement data to track customers’ daily eco-actions and rewards customers making greener choices.

Octopus Energy

This energy company uses open banking to assess the financial status of financially vulnerable customers and increase efficiency in the process of conducting eligibility checks for its social tariffs.

Pardna

An informal collaborative saving and lending app where a group of people – typically friends and family – come together and agree to submit a fixed amount every week or month to a central pot. The person managing this central pot will then arrange for one person in the group to receive all the cash in the central pot.

SuperFi Finance

Uses open banking combined with proprietary algorithms to analyse an individual customer’s financial situation to deliver personalised debt advice and access to integrated debt reduction tools/services. Customers can download their categorisation of income and expenditure and use it to seek help from debt charities.

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.

Evolution of the ecosystem

These alternative regulatory routes to market are providing a vehicle for firms to bring innovative and differentiated services to market. This is a dynamic market with companies launching services to test the commercial viability of embryonic propositions. For example, 33 new propositions came to market between March 2022 and the end of the year – a 24% increase, but conversely a significant number of firms exited the market over the same period (9%).

The other area of activity and development is in the “other providers” market. There is still no accepted data on the number of “other providers” using open banking data although we note that our estimate of ~1,000 in the March 2022 report has not been challenged by the Platform AISPs which are the only players able to understand this segment the market.

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.

However, we are not currently able to provide a more accurate number of “other providers” in the market beyond the March 2022 estimate of ~1,000.