- 73% of UK banks are more positive toward open banking than last year.
- This positive attitude could potentially create partnership opportunities for fintechs, which could be a valuable lifeline amid a decline in funding deals.
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Seventy-three percent of UK financial institutions (FIs) indicated they have a positive attitude toward the open banking movement in 2020, compared with 48% in 2019, per Tink. This marks a 25% jump in a year and is also 12% higher than the European average. What’s more, UK FIs’ annual increase is the largest of the surveyed European countries.
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The positive attitude likely comes as UK FIs overcome additional regulatory obligations and, in turn, start to view open banking as an opportunity for value creation.
- While contending with PSD2, UK FIs have had to comply with additional Open Banking Standard Requirements. Fifty-six percent of UK FIs stated that Open Banking regulation was a threat to their business, outstripping the European average of 39% in 2019, per Tink. This highlights how UK FIs were preoccupied with the UK’s Open Banking Standard, in addition to the EU-wide PSD2. A year down the line, they’ve started to move past the first wave of regulatory challenges, and have had to contend with additional compliance requirements under the Open Banking Standard, namely enforced common API standards, which make third-party integrations more straightforward, unlocking a series of potential use cases.
- Now, these players are increasingly perceiving open banking as an opportunity for growth. While 52% of UK FIs saw open banking as an opportunity in 2019, 66.7% do so now, which is almost 10% higher than the European average. They recognize the opportunities associated with leveraging open banking to deliver greater personalization by holding a more comprehensive view of their customers and consequently offering more timely and relevant services, among other use cases, such as third-party integrations to offer their customers a broader array of services.
As UK banks devote more resources to enhancing their services via open banking, fintechs have an opportunity to partner with them to deliver success. More UK FIs have increased their spend on open banking initiatives than any other European nation in 2020, compared with 2019.
Additionally, 33.3% indicated they’ll seek to partner with a fintech as part of their open banking strategy in the next 12 months — the second most of its European counterparts. The combination of these factors presents a golden partnership opportunity for fintechs. As fintech funding deals decline and early stage fintechs are struggling to access capital, B2B open banking fintechs have an opportunity to take advantage of UK banks’ positive attitude toward open banking and partner to help them deliver their goals and drive revenue gains for themselves.
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