Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
UK Open Banking Update and Road to Open Finance
UK Open Banking | Oct 16, 2025
The UK’s Open Banking Update and the Case for Open Finance
On October 6, 2025, the FCA published a research note on open banking and open finance in the UK providing the most comprehensive update since the 2017 Open Banking Implementation Entity framework. The FCA report confirms that open banking has become a core part of the UK financial system, delivering measurable gains in innovation, competition, and consumer outcomes while setting a clear path towards open finance.
Open Banking By the Numbers
The FCA reports 13.3 million active users in March 2025 including individuals and businesses.
During early 2025 there were over 23 million one off open banking payments and about 3.7 million variable recurring payments in March.
There are more than 240 regulated third party providers active in the market.
See: FCA Outlines Governance for Open Banking Standards Body
The numbers show that most people start by using open banking for simple payments, then they move on to apps that help them manage money. These tools make it easier to track spending, combine accounts, and manage business cash flow. What began as a way to share data safely is now part of everyday financial life.
Competition and Consumer Outcomes
The FCA links the regulatory model to outcomes that people and firms feel and understand. API payments lower acceptance costs for many merchants, clear faster in regular use cases, and have lower charge-back risk.
Users of open banking tools report stronger confidence in managing money, better visibility over credit, and simpler product comparisons.
A growing share of regulated payment initiation and data services is now provided by non-bank firms. This is exactly what regulators aimed for, which is fair competition made possible by shared standards and clear oversight.
The Case For Open Finance
In April 2024, KPMG published a report on the roadmap to open finance in the UK. Now the FCA and HM Treasury are preparing an official Open Finance Roadmap for publication in early 2026.
Pilot activity is under way in mortgages, pensions, and small business lending. The technical stack is being upgraded so that systems use the same data format as ISO 20022. This lets APIs from different products connect and share information more easily.
See: Canada’s Payments Innovation Push Gains Speed
Regulators are also testing shared rules for who is responsible if something goes wrong, and new dashboards that help people see and control which companies can use their financial data.
Commercial variable recurring payments are a key part of open banking’s next phase. They let customers authorize businesses to take payments automatically when conditions are met, such as usage or subscription activity, without having to reapprove each transaction. The UK Finance Wave 2 report on commercial variable recurring payments shows that adoption depends on clear business rules, predictable pricing, and consumer trust. It estimates that recurring payments could save merchants around £1.5 billion a year in processing costs while improving user convenience.
The report also points out that success will rely on creating fair commercial frameworks that balance innovation and stability. Clear incentives for both banks and payment providers can help recurring payments scale, lower operating costs, and give consumers more choice over how and when they pay.
International Perspective
The FCA’s benchmarking compares progress across Brazil, Mexico, Australia, Singapore, the United Arab Emirates, and Canada.
Brazil has a nationwide open finance network across multiple product types with mandatory participation.
Mexico continues to develop its framework with a measured, regulator led approach.
Australia extends the Consumer Data Right into energy and telecom.
Singapore and the United Arab Emirates use structured sandboxes and staged licensing to build interoperability.
Canada is recognized for policy design progress and oversight planning as implementation begins.
The common thread is that progress accelerates when governance is clear, standards are usable, incentives are aligned, and protections are visible.
Regulating for Growth
The UK model brings competition policy, innovation policy, and consumer protection into one framework. Access is enforceable. Participants are certified. Interfaces are standard.
See: Regulating for Growth by Understanding Innovation
These choices lower barriers to entry and invite new financial intermediaries. Smaller providers compete on experience, cost, and transparency while trust in security remains high.
As open finance develops, success is measured by consumer value, SME productivity, and long term competitiveness. Effective regulation designed for growth becomes a national asset.
Outlook
Open banking in the UK is about 7 years ahead of Canada's implementation, assuming Canada is still on track to implement phase 1 of open banking in 2026 (some have been told to expect Open Banking updates to be included in the Fall economic statement announced on November 4, but will it include an implementation timeline? Time will tell). The 2025 FCA update shows what can be achieved when regulation, technology, and market incentives pull in the same direction.
See: Global Open Finance Lessons for Canada’s Rulebook
Open banking in the UK didn't reach scale overnight. It was built through coordinated governance, working standards, and consistent oversight. The move to open finance will test each jurisdiction’s balance of innovation and protection.
With the right structure, regulation can accelerate innovation, expand competition, and deliver lasting value across the financial system.
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