The Open Banking Implementation Entity (OBIE) said UK small and medium-sized enterprises (SMEs) could gain an extra £12bn a year from open banking, with consumers set to benefit from a £6bn open banking boost.
In a report, the organisation – which was created by The Competition and Markets Authority in 2016 to deliver Open Banking – found that a total of £18bn in extra value can be created in a year by open banking if it delivers on its promise.
Open banking, which was introduced by the government, enables third-party financial services suppliers access to customer data – if the customer agrees – through application programming interfaces (APIs). This means suppliers can offer consumers and businesses financial services that suit them, and ultimately save them money.
For example, the OBIE report said people who are struggling to make ends meet could save up to £287 per year through “more tailored services which reflect their lifestyles, and simple, intuitive products that help them make sense of their lives”.
Meanwhile, small businesses get better deals, can make their money work harder, and have access to financial services previously only available to large businesses.
The report also highlighted the complex challenges ahead to reach its value creation targets.
“Many of the most valuable open banking-enabled propositions are not yet available to consumers, and there are a range of barriers which prevent these services coming to market today,” said the report.
It added that even when some of these services are available, there are barriers to overcome to get people to use them. The report said that problems such as the mis-selling of payments protection insurance (PPI) and fears that tech giants use data in a questionable way makes consumers wary.