INTERMEDIATE OUTCOMES 1 (ADOPTION)

Headlines

We estimate that 7.5 – 8.5% of digitally enabled consumers and small businesses used open banking at the end of August 2021. This figure has increased from 5 – 6% in December 2020, so has steadily increased in the first eight months of 2021.
Successful API calls have grown by 83% in the six months to August 2021, indicating strong growth in the use of open banking5
Improved decision-making continues to represent an estimated 60 – 70% of successful API calls in August 2021.
Savings and investments represented an estimated 15 – 20% of successful API calls in August 2021, despite only accounting for five out of 119 propositions in market.

Open banking penetration

Using data submitted to the OBIE by the CMA96 we have estimated the penetration of open banking into the total base of digitally-enabled consumers and small businesses. As with much of this analysis it contains assumptions and estimates and should be considered directional only. See Figure 6.

Figure 6: Estimated penetration of open banking into the broader digitally-enabled population

5See caveats in relation to this data and the inferences that can be drawn from it in the commentary below.

6The CMA9 refers to the nine largest banks and building societies in Great Britain and Northern Ireland, based on the volume of personal and business current accounts. AIB Group (UK) plc trading as First Trust Bank in Northern Ireland, Bank of Ireland (UK) plc, Barclays Bank plc, HSBC Group, Lloyds Banking Group plc, Nationwide Building Society, Northern Bank Limited, trading as Danske Bank, The Royal Bank of Scotland Group plc, Santander UK plc (in Great Britain and Northern Ireland).

Source: 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 PSU numbers and digitally active end users by the CMA9. It therefore only represents penetration within the CMA9 digital customer bases, although this represents a very 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.

Recognising the limitations of the underlying data, we can estimate that one in 13 digitally-enabled end users were using at least one open banking-enabled product or service in August 2021. This figure has increased from 1 in 40 since January 2020.

One in 13 digitally-enabled end users were using at least one open banking-enabled product or service in August 2021. This figure has increased from 1 in 40 since January 2020.

Results: Successful API calls

API calls are a core metric which demonstrate the amount of activity occurring within the ecosystem. It also indicates the number of active users of open banking, although it should be used with caution as there are other significant drivers of API call growth beyond an increase in open banking users.

In the six months to end August 2021, the number of API calls has grown by 83% (see Figure 7). This growth is significantly stronger than the growth in live to market providers suggesting that end users are progressively adopting and using the services in market.

However, it is also clear from the data that the growth level in data APIs is starting to level off after a period of very strong growth.

Figure 7: Number of successful API calls

Source: OBIE, based on reporting by the CMA9 banks.

Note: Successful API calls are based on data submitted by Account Servicing Payment Service Providers (ASPSPs) to OBIE. There is no data prior to May 2018. May to July 2018 includes data from eight providers. August 2018 onwards includes data from nine providers and 16 brands in total. In June 2019, the number of brands increased to 17. In July 2019 this increased to 18 brands. Since May 2020 it includes 19 brands.

Successful open banking payments

Until recently end users have predominantly been adopting and using open banking data services. However, the use of open banking payments is growing due to the progressive rollout of open banking payment acceptance by large companies and institutions such as HMRC, Cazoo and JustGiving.

There have been 11m open banking payments reported to OBIE in between March 2021 and August 2021 (See Figure 8). In August, the number of payments reached 2.4m and the month-on-month growth rate is running at 18%.

Figure 8: Number of successful payments

Source: OBIE.

Note: Successful payments initiated by third party providers using Open Banking APIs, based on data submitted by ASPSPs to open banking. There is no data prior to July 2020. Includes data from nine providers and 19 brands.

The use of open banking payments is growing due to the progressive rollout of open banking payment acceptance by large companies and institutions such as HMRC, Cazoo and JustGiving.

Successful API calls by outcome area

We can only give an indicative mapping of API calls to outcome area. One of the significant limitations with this analysis is that some propositions are much more intensive in their utilisation of API calls. For example, a payment transaction will in most cases require less than three API calls, whereas a personal finance manager (PFM) proposition could result in 100s in a typical month (depending on frequency of usage and number of payment accounts added). See Figure 9.

Figure 9: Estimated API calls by outcome area (August 2021)

Source: OBIE. Note: This data is based on submissions of CMA9 ASPSPs. This partial data has been coded by allocating to outcome areas. API volumes cannot necessarily be correlated to levels of customer adoption because different propositions have different levels of API calls per PSU, but provide an indication).

The data suggests that API calls remain dominated (60 – 70%) by providers of financial decision-making products and services, such as PFM services. API calls remain low for several outcome areas such as increased switching and access to advice.

Growth in expanded payments choice

One important change to highlight is the growth in expanded payments choice. We estimate that expanded payments choice accounts for 5 – 10% of API calls, even though payments propositions tend to be less intensive in terms of the number of API calls they generate compared to other propositions. The analysis continues to suggest that increased savings and investments has a higher share of API calls (10 – 20%) than its availability would suggest (only five providers out of 119). We continue to tentatively conclude that increased savings and investments is emerging as an area of strong end user adoption.