The UK leads Europe in Open Banking services, but fares poorly in customer engagement and impact. That’s the finding of a new survey from Open Banking FinTech, Yolt Technology Services (YTS).
YTS’ European Banking Outlook examines progress in Europe’s six largest Open Banking markets: the UK, Spain, France, Germany, Italy, and the Netherlands. It was compiled from public data sources, independent banking research, and surveys commissioned from Censuswide by YTS and economic consultancy CEBR.
It finds that the UK leads its competitors in the field, with an overall score of 64.5 out of 100, representing an average across four categories: the openness, availability, engagement, and impact of Open Banking services.
The UK scored highest in openness and availability, with marks of 81 and 82, respectively.
According to YTS, the burgeoning FinTech sector is a key factor. There are at least 274 active third-party providers (TPPs) in the surveyed countries, and nearly two-thirds of them (63 percent) are registered in the UK.
Britain’s progressive regulatory environment stimulates innovation in both TPPs and established banks, adds the report. “Only in the UK have policymakers and regulators extended the legal and regulatory foundation for Open Banking and created a framework based on cooperation.”
Supportive moves include the creation of the UK’s Open Banking Implementation Entity (OBIE) and parent organisation the Competition and Markets Authority’s mandate on API connectivity.
Nearest rival Spain scores 48 and 62 in openness and availability. However, it ranks more highly than the UK in customer engagement and impact: 86 and 71, respectively, compared with the UK’s 32 and 33 (which are among the lowest marks in those categories).
This helps Spain reach an overall score of 63.1, just over one point behind the UK. France, Germany, and the Netherlands lag some distance behind in the 40s, while Italy brings up the rear, with 39.7 out of 100.
Third-placed France also fares much better than the UK in engagement and impact, with scores of 64 and 47. So why has the UK fallen behind its rivals in these areas?
“While there is genuine support and a proactive regulatory environment for Open Banking to flourish [in the UK], progress has been slowed by scepticism from banking customers around the benefits of Open Banking,” explains the report.
That scepticism is found right across Europe to varying degrees: on average, 40 percent of customers in the six nations are not using any form of Open Banking services, according to YTS, including over half of customers in the UK* and Germany.
By contrast, less than one-quarter of customers in Spain (23.5 percent) have not signed up, so it is doing a much better job of communicating the benefits. Spain’s score of 86 out of 100 for customer engagement is the highest for any nation across all four categories.
Over two-thirds of survey respondents (67 percent) say the ability that Open Banking offers to view transactions or savings across multiple accounts is “very useful”, but other benefits are less well known.
So, with the highest overall national score, the UK’s, standing at just 64.5, YTS’ findings show that there is plenty of room for improvement in Open Banking – and significant growth potential. All six countries can learn from each other’s successes.
*: Other reports – including figures from the OBIE – suggest that fewer than four million UK customers (less than 10 percent of UK bank account holders) have so far signed up to Open Banking services.