Open banking is reaching new highs with active UK users reaching seven million in May this year according to Statista – an increase of two million in just one year.

With 2023 turning out to be a pivotal year for open banking as Yapily predicted, Money 20/20 2023 was a key moment in the event calendar. We’ve put together some of the key insights, headlines and learnings from our time at Money 2020 2023.

Headlines from Money 20/20 2023

Open banking was front and centre from day 1 of Money 20/20 Europe, kicking off with an introduction to ‘Open For Banking: A Proper Inquisition (API)’ workshop. There was a particular focus on Identity Verification and KYC powered by open banking, which was also a popular talking point on the Yapily stand – more on this below.

Keynote session - The open banking journey so far

The event kicked off with a keynote outlining the outstanding progress of Open Banking over the past five years. Finextra reported on the panel session ‘From Concept to Reality: Five Years of Open Banking’.

Hot topics from the keynote included:

• A call to re-look at the building blocks of open banking - financial inclusion, financial well-being and the advancement of tech in financial services businesses - to develop them more progressively.
• The pandemic enforced a two-year hiatus for open banking development - and now the hard work really needs to get started.
• The need to move away from focusing on the term ‘open banking’, turning the lens towards the problems it can solve for individual sectors, whether it’s data, payments or a combination of the two.
• The UK opening banking frameworks and initiatives are seen positively from a global perspective - but there are more ambitious ventures outside the UK and Europe.
• PSD2 was a great start to the opening banking journey, but the general consensus is that much more can be done.

Meet the Three Pillars of Disruption: AI, Open Banking and Instant Payments (panel session)

Nick Strauss, Tribe Leader, B2B Services, Rabobank, shared interesting experiences and learnings as Rabobank progressed on its open banking journey including:

• Data Ownership - Rabobank has a data manifesto that asserts that data is owned by the customer. This principle guides the design of solutions and ensures customer benefit drives everything they do.
• Share expertise - Rabobank set up an internal ‘expertise centre’ as a resource for all departments. It helps them effectively use open banking to modernise traditional financial services and bring them to market in a way that benefits the customer.
• User Experience – Open banking should be a beautiful user experience - and accessible. Access to the product, setting it up, and testing it using the documentation should be seamless for the user.
• Set different priorities – for example, prioritise your team’s understanding of the APIs and their development, and that documentation is both aesthetically pleasing and accessible.

Crypto & Beyond: The Future of Digital Payments (panel session)

David Birch was amongst the panellists in this engaging session and made an important point about how AI will combine with banking and payments. “The most disruptive technology is not blockchain, it’s not open banking, it’s not anything like that. The most disruptive, by a mile, is AI. It is an event horizon.” David recently published an article in Forbes entitled ‘The Impact Of ChatGPT And Open Banking Cannot Be Underestimated’.

What’s happening with the PSD3 and the Open Finance Regulation?

The team fielded many questions about the upcoming PSD3 regulation. Here are some of the main points we know so far, and a few Yapily opinions:

• Good news - existing open banking functionality looks like it will remain free which will be a driver of continued growth of open banking across the EU. Also the EBA has been ordered to review the OB standards, which should help with getting some consistency across functionality and performance.

• The EU will leave it up to the commercial space to implement premium Open Banking APIs regarding Dynamic Recurring Payments (aka Variable Recurring Payments) . Commercialisation mandates as part of PSD3 could have meant faster change, but the most important takeaway is that current innovations in open banking remain free.

• Financial Data Access proposal (FIDA) is an outcome of the Open Finance consultation and sets out how industries can access, share and use a wider array of financial data, in alignment with GDPR. We’re encouraged to see as part of this, calls to develop common standards for data sharing interfaces.

• Looking ahead - we hope to see EU member states harmonise and work towards commercialisation of Open Banking and Open Finance API’s, laying the groundwork for further innovations.

How is open banking impacting Know Your Customer (KYC)?

This was one of the other hot topics at the Yapily stand at Money20/20 2023. ‘Everybody can see the innovation that open banking has unlocked in payments,’ said Stefano Paoletti, Senior Vice President of Sales UK at Yapily. ‘And now attention is turning to what it can do to make KYC more efficient, faster and less costly.’

There are different levels of KYC checks, depending on the financial product or service being sold. But, no matter what level of check is needed, the goal is always the same: to make sure the customer is trustworthy.

This is how Yapily explained how open banking is being used to simplify KYC. ‘Think of it like a digital passport,’ said Stefano Paoletti. ‘But instead of being used for travel, it would be used for identity verification, making it faster and more accessible for a better experience and powered by open banking.”

A glance in the open banking rear view mirror

Looking back at last year’s Money 20/20 event, it’s interesting how open banking conversations have moved on. Sessions focused on fostering collaboration between fintechs and banks as a route to delivering open banking benefits. Also, other conversations were dedicated to helping banks monetise open banking. This year, it is great to see banks and fintechs working closely together and there are few banks that do not see the potential to monetise open banking.

Final word

As is happening in almost every industry, the potential impact of AI was a hot topic. As pointed out by David Birch, AI will create tremendous opportunities for innovation in open banking and many other areas. We are excited to find out how things will have moved on at Money 20/20 next year!