The Open Banking sector could be worth £2.8bn by the end of this year and £7.2bn by 2022, according to a report from PwC.

The professional services firm combined with the Open Data Institute to survey over 1,000 retail and small and medium-sized enterprise (SME) banking customers across the UK, along with interviews among banks, FinTechs, technology firms, regulators and industry bodies.

It found that 71 per cent of SMEs expected to adopt Open Banking by 2022, along with 64 per cent of adults.

The regulatory initiative, which forces the UK’s biggest banks to share customer data in a secure way via open Application Programming Interfaces (APIs), was rolled out at the start of 2018.

However, the report found that awareness amongst the general public is low, while for those that have heard of it, 48 per cent of retail banking customers and 54 per cent of SMEs said security is their biggest concern.

When it comes to what information individuals would be willing to share, just 10 per cent cited transaction history, while 12 per cent said that they would share information about their financial products.

While Open Banking presents a huge opportunity for third party firms to corner specific parts of the market, PwC found traditional banks are popular with businesses, with 72 per cent of SMEs favouring them over FinTechs and peer-to-peer lending firms – with 62 per cent of individuals also happy to stick with existing providers.

PwC financial services payments leader Jonathan Turner said that the scheme is a potential game-changer for individual and corporate consumers.

“It provides an opportunity to transform the public’s interaction and everyday experience with the financial services industry, but there are still many ‘hard yards’ to travel,” he stated, adding: “Few disruptive propositions have been developed so far.”

David Beardmore, commercial director at the Open Data Institute, said that Open Banking has the potential to radically transform the way in which people engage in banking services, receive money and make payments.

“It is likely to cause significant disruption to how consumers think about banking, who should provide banking services, who will inform and guide us, how, when and why will we allow organisations that are not our banks to have access to our financial data,” he commented.

“Could this even change the composition of the traditional banking institutional landscape? Some think this could be the catalyst behind a revolution in how we perceive personal and SME banking.”

Share Story: