In the four years since Open Banking launched, 4.5 million people in the UK alone have started using Open Banking products regularly, with that number increasing every month.
So, how have we got here? And more importantly, where do we go next? We have barely scratched the surface of what Open Banking is capable of – there is plenty more to come.
Open Banking: Where are we today?
What does the future look like for Open Banking?
Open Banking and cryptocurrency
For a while Open Banking was seen as a rival to cryptocurrency. It offered innovation within payments without abandoning traditional payment rails.
But as everyone knows, crypto offers so much more than this, so Open Banking providers and cryptocurrency companies should be looking at partnerships. Klarna’s collaboration with Swedish cryptocurrency broker Safello is one example. Using Klarna’s Open Banking, Safello’s 180,000 users can purchase cryptocurrency directly from their bank account in a quick, easy and native experience. Innovation such as this will help develop cryptocurrency, not hinder it.
Open Banking and investment
Investment companies can be big beneficiaries of Open Banking, and Wealthify’s partnership with Tink is already blazing this trail.
Tink is a PISP which makes transfering funds for investment a far quicker and easier process for Wealthify users. They expect the number of users to double to 100,000 within 12 months and have noted “The customer response has already been brilliant, and our partnership enables us to make more of our customers’ money work harder, by maintaining our market-leading low fees.”
From Open Banking to embedded finance
Our final prediction for the future of Open Banking is that it will act as a stepping stone to embedded finance. As Open Banking becomes commonplace, consumers will not only be comfortable linking their personal account data to other services, they will expect it. A native, all-in-one experience that includes their bank (either account data or payment processing) will become so seamless, having to handle finances separately will be considered frustrating and antiquated.
Embedded finance makes that possible. Short-term loans can be offered by clothing sites, investment opportunities may appear when shopping for groceries. It’s down to what the business thinks is right for their customers.
Crucially, this is all done within the site itself, without partnering with multiple providers at high costs. This is exactly the type of service OpenPayd offers – enabling businesses from all industries to enhance their offering and change the way we experience financial services.
Open Banking has enjoyed an impressive rise, but we are confident that the best is yet to come. Most importantly, it, along with embedded finance, is helping drive finance forward, providing better products and services for businesses and consumers.
We’re already looking forward to writing about its achievements in 2022.
Originally published at IAMTN- Payments Network