Open banking becomes core UK fintech infrastructure
Mon, 23rd Mar 2026
Open banking has become a core part of the UK's financial infrastructure. Since its introduction in 2018 as a regulatory requirement, it has grown into a system used across payments, lending and personal finance.
It allows consumers and businesses to share bank account data with authorised third parties through standardised application programming interfaces, or APIs. Originally introduced as a competition measure targeting the UK's largest banks, it has become a base layer for a wide range of fintech firms, technology providers and established financial institutions.
Regulatory basis
The model grew out of regulatory intervention in UK retail banking. The Competition and Markets Authority required the largest banks to open access to customer data through common technical standards, while the revised Payment Services Directive gave customers the legal right to share financial information securely with approved providers.
Together, those measures created a common framework for account information and payment initiation services. Instead of connecting separately to each bank through different standards, third-party providers could build on a more unified system.
When open banking formally launched, the first services focused on account data access and direct bank-to-bank payments. Early consumer products centred on account aggregation, with apps such as Yolt and Money Dashboard giving users a single view of balances, spending and savings across multiple banks.
Specialist infrastructure firms quickly moved to fill a market gap. Companies, including TrueLayer and Tink built connections between banks and software developers, allowing fintech groups to use banking data without creating separate links to each institution.
Fintech expansion
A second wave of businesses built services on top of that infrastructure. Digital banks, including Revolut and Monzo, used open banking to let customers link external accounts and view a broader picture of their finances in one place.
Savings and automation apps such as Plum and Chip used transaction data to analyse spending patterns and trigger deposits automatically. In consumer and small-business lending, access to real-time income and cash flow data gave lenders an alternative to relying solely on traditional credit scores and uploaded documents.
This changed how some credit assessments are handled. With customer consent, lenders can use current account data to make decisions based on more up-to-date information and spend less time collecting paperwork.
Payments change
Payments have been one of the market's most closely watched areas. Open banking has supported account-to-account transactions, often described as pay-by-bank, which move funds directly between bank accounts without using card networks.
Providers such as TrueLayer and GoCardless have built systems that let businesses collect money directly from customers' bank accounts. For merchants, this can reduce transaction costs and remove the need to collect card details. For users, it provides another payment option at checkout, for account top-ups and withdrawals, and for some recurring payments.
The shift has widened the payment options available to businesses. E-commerce groups can add bank payments alongside cards, while financial apps can use the same rails to move money in and out of customer accounts.
Business use
Adoption has also spread among businesses, especially small and medium-sized enterprises. Accounting platforms, including Xero and QuickBooks, let companies connect bank accounts and import transaction data automatically, reducing manual entry and providing a more current view of cash flow.
Other fintech lenders and financial software groups use open banking data during onboarding. Instead of asking applicants for bank statements and other documents, they can access verified financial data directly once permission is granted.
Behind that growth, a competitive infrastructure market has emerged. Plaid has expanded globally by linking thousands of financial institutions to apps, while Tink has broadened its European presence under Visa ownership. UK-based providers have focused particularly on payments and real-time data access.
These intermediaries have played a central role in scaling the market. Their systems simplify integration for developers and reduce the technical burden on newer entrants.
Economic role
Consumer use has risen steadily since launch, with millions of UK users now relying on at least one service built on open banking. Usage spans personal finance dashboards, automated savings tools and direct payment services, and secure data sharing has been an important factor in user acceptance.
The economic effect is also becoming easier to quantify. Estimates suggest open banking could contribute as much as GBP £43 billion a year to the UK economy at full maturity through lower administrative costs, faster payments and the creation of new financial products.
It has also lowered some barriers to entry in finance by allowing new firms to build services without operating as full-service banks. That has increased competition in areas such as payments, money management and credit assessment.
Attention is now turning to open finance, which would extend similar data-sharing principles beyond current accounts into products such as pensions, investments and insurance. That would broaden the reach of a model that has already reshaped how data moves through the UK financial system.
In less than a decade, open banking has moved from a regulatory remedy to a central part of the infrastructure supporting fintech services, direct payments and digital access to financial information.