Demand for Open Banking enabled products has more than doubled in the last six months as more than two million users turned to digital financial services during the pandemic.

Data from the Open Banking Implementation Entity (OBIE) shows an increase in uptake of products that give users more personalised financial services, with Application Programming Interfaces (APIs) enabling secure data sharing between accounts and third parties as well as aggregating information from multiple accounts in one place.

The data suggests that consumers are now using Open Banking-enabled products to better understand their spending, how to save, manage their income and expenditure or access cheaper credit.

The OBIE, which was established by the Competition and Markets Authority (CMA) to deliver Open Banking services in the UK, said that the figures represent “a significant upswing” in the use of the innovative banking technology despite the disruptive effects of the COVID-19 pandemic.

Uptake has been increasing at a rate of around 160,000 users per month, which plateaued in April and May when lockdown measures in the UK were introduced, before strong growth resumed.

Research sponsored by Nesta Challenges’ Open Up 2020 Challenge, shows a sharp increase in the use of money management apps during the pandemic, of which 45 per cent were 25-34-year-olds.

According to the survey of 2,000 UK adults in early July 2020, one in five started using online banking apps during lockdown and 54 per cent now use them regularly.

Open Banking payments (which allow users to make payments conveniently and securely from their bank accounts) are also expected to drive growth in the future, as Open Banking enabled payments providers take advantage of increased functionality coming online to bring innovative payment products to the market.

The findings follow the Government's launch of its National Data Strategy and publication of its response to the Smart Data Review, which recognised Open Banking as a leading example in the area of Smart Data and the benefits it can offer to citizens and small businesses.

Imran Gulamhuseinwala OBE, implementation trustee at The Open Banking Implementation Entity (OBIE) said: “Open Banking used to be the best kept secret in financial services. With 2 million active monthly users and growing strongly that is clearly no longer the case. We can now see that people want to exercise their rights over their data and will do so, as long as you make it simple and secure.

He added: “Open Banking enabled products are rebalancing the market in favour of consumers and small businesses. Users are now able to engage more with their finances and getting access to better products.”

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