For many people, the thought of open banking brings up thoughts of the UK. After all, it is one of the most popular countries for the revolutionary banking movement and recently reported 7 million open banking users — a massive growth from 5 million just last year.
But while open banking is definitely big in the UK, it started its spread to the rest of the world years ago.
Open banking is extremely popular around Europe, and countries in Africa, South America, Asia and more started years ago to look into ways they, too, can implement open banking strategies.
First, let's examine what open banking looks like in the UK. All open banking regulations throughout Europe fall under the 2018 PSD2 directive: legislation that was passed by the European Commission to regulate and standardize open banking practices around the continent. In short, PSD2 made open banking a regulatory requirement in the UK and other European countries.
In the UK specifically, open banking has taken off; in the last few years, the number of users has jumped by the millions, from 1 million in 2019 to 5 million in early 2022 and just this spring, 7 million.
There are different reasons for open banking’s success in the UK – including, simply, the ease, convenience and safety that open banking offers (read more about benefits here)– but some attribute it to UK-based regulatory bodies. A major one is the country’s Open Banking Implementation Entity (OBIE), which has developed industry standards and guidelines to ensure open banking technology performs well in the country.
Open banking’s success in the UK is rivaled by its success in the rest of Europe. In the last few years especially, open banking has taken off across the continent, and has found popularity in nearly every country, particularly Germany and Sweden, which have become open banking hubs in recent years. Poland, too, has become a hotspot for open banking, as have France and Italy. In fact, as of last year, Europe accounted for almost half of the open banking users across the world. There are many more statistics showing the popularity of open banking in the EU over the past few years, which you can read here.
The popularity of open banking continues to grow around Europe… and the world. Some reports predict open banking usage will increase five times in the next four years, with much of that activity coming from Europe. And regulations are set to improve, too. Last year, the European Commission called on experts to give thoughts on PSD2, in order to assess what changes might be needed for the next iteration of the directive.
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