Open banking has taken the financial world by storm. There are millions of payments being made (21 million this year, to be precise) and hundreds of thousands of businesses benefitting from access to data. But who exactly is using open banking, and what benefits are they seeing? Let’s find out…

Open banking stats every business should know

In 2023, open banking is expected to generate £7.2bn in revenue (PwC)

More than 600,000 British businesses now use open banking (Open Banking Implementation Entity)

82% of businesses using open banking are data users (Open Banking Implementation Entity)

12% of businesses using open banking are payment users (Open Banking Implementation Entity)

Wondering what the difference is? With open banking data, businesses can access a dataset spanning years to verify a customer’s identity, perform affordability checks, or onboard customers. Enriched data, which is cleaned up and categorised, offers an additional layer of insight to fulfil use cases such as balance prediction and debt anticipation.

Open banking payments, on the other hand, rival traditional methods. For instance, Variable Recurring Payments (VRP) - while still in their infancy - have the potential to undercut Direct Debit on time and cost. Single Payments facilitate a secure and cost-effective way to make one-off transactions, whereas Bulk Payments address the challenge of stitching together multiple payments, such as payroll.

The number of UK payments made via open banking is growing by 10% month-on-month (Open Banking Implementation Entity)

33% of businesses are considering using open banking to support their businesses (Yapily)

19% of businesses have heard of open banking, but don’t understand how it could benefit them (Yapily)

And 13% of businesses haven’t heard of open banking at all (Yapily)

31% of businesses recognise open banking could reduce administration time (Yapily)

29% of businesses say open banking would help their business lower costs by providing a cheaper payment method (Yapily)

Open banking and accounting

Access to data unlocks new opportunities for accounting. Data aggregation and payment reconciliation are two prominent use cases, enabling accountants and businesses to quickly resolve any discrepancies.

72% of businesses highly rate open banking as an accounting feature (Open Banking Implementation Entity)

58% of businesses highly rate real-time transactions enabled by open banking as an accounting feature (Open Banking Implementation Entity)

70% of businesses say open banking as an accounting feature has helped them manage late payments (Open Banking Implementation Entity)

79% of businesses say open banking as an accounting feature has helped them make better business decisions (Open Banking Implementation Entity)

Ultimately, open banking could reduce debtor days by up to 66% (Yapily)

Open banking and lending

Open banking helps lenders gain a clear understanding of an applicant’s creditworthiness. Affordability checks and income verification are two growing use cases that allow lenders to access real-time insights.

26% of lenders currently use open banking (Credit Kudos)

82% of lenders are expected to use open banking by 2023 (Credit Kudos)

Open banking can reduce the time spent processing loans by 85% (Yolt)

47% of lenders agree open banking can help lower the cost of making credit decisions (Credit Kudos)

43% of lenders agree open banking can boost the accuracy of credit decisions (Credit Kudos)

Open banking and traditional banks

Digital banks, and traditional banks, can leverage open banking to aggregate consumer and business accounts in one place.

7 out of 10 banks say open banking can increase their customer reach (Finastra)

65% of traditional banks say they don’t have an open banking strategy yet (PwC)

But, 53% of banks say they’ve started working on an open banking strategy (PwC)

64% of consumers would use open banking services for savings (Open Banking Implementation Entity)

36% of consumers would use open banking services for personal finance management (Open Banking Implementation Entity)

75% of businesses are still relying heavily on financial services provided by traditional banks (Yapily)

But, 38% of businesses trust challenger banks with their data just as much as they trust traditional banks (Yapily)

And 35% of businesses trust challenger banks with their money just as much as they trust traditional banks (Yapily)

Open banking and payment services

Consumers and businesses pay by card for most things. But, card payments aren’t all they’re cracked up to be. For merchants, funds can take hours, or even days, to settle. With open banking, payment services can offer merchants instant settlement, and customers instant refunds.

Between October 2021 and March 2022, more than 21 million open banking payments were processed in the UK (Open Banking Implementation Entity)

The monthly value of processed payments is £36M on average (Yapily)

Open banking can save an average of £1000 in fees for every 25 invoice payments (Yapily)

Open banking payments are currently growing at a rate of 500% year on year (Open Banking Implementation Entity)

Open banking payments have an average 90% success rate (Yapily), whereas card payments fail up to 15% of the time (GoCardless)

So, how are consumers using open banking?

6 million people in the UK now use open banking (Open Banking Implementation Entity)

11% of digitally-enabled consumers are active open banking users (Open Banking Implementation Entity)

64% of consumers are data users (Open Banking Implementation Entity)

32% of consumers are payment users (Open Banking Implementation Entity)

6% of consumers are data and payment users (Open Banking Implementation Entity)

80% of consumers say they are confident they understand the financial options available to them to help manage their money (Yapily)

But, 52% of consumers say they’ve never heard of open banking (Yapily)

68% of consumers using bill management tools are using them for the first time in the last 12 months (Yapily)

68% of consumers have tracked their credit score for the first time in the last 12 months (Yapily)

63% of consumers using budgeting apps are using them for the first time in the last 12 months (Yapily)

36% of consumers have used a credit card for the first time in the last 12 months (Yapily)

And 27% of consumers have used Buy Now, Pay Later (BNPL) for the first time in the last 12 months (Yapily)

75% are using open banking-powered PFM tools to keep on top of expenditures (Open Banking Implementation Entity)

64% of consumers are using open banking-powered PFM tools to stick with a budget (Open Banking Implementation Entity)

62% are using open banking-powered PFM tools to reduce unnecessary expenditure (Open Banking Implementation Entity)

59% are using open banking-powered PFM tools to shop around more (Open Banking Implementation Entity)

55% are using open banking-powered PFM tools to reduce fees and costs (Open Banking Implementation Entity)

So, what’s next? For one, these stats should help you make the case for investing more into open banking. Check out this blog if you’re trying to secure buy-in from your stakeholders. Find more stats in our latest report, Connecting the Dots: Open Banking and Financial Wellbeing, with first-hand insights from innovative companies like Emma, Crezco, and Yonder.