UK has laid observe for open banking, however didn’t run trains
The UK is shedding its management in open banking, having “laid the rail observe, however hesitated to run the trains”, the writer of a landmark UK fintech report has warned.
On the fifth anniversary of a UK fintech sector evaluate, described as “seminal” by fintech business physique Innovate Finance, its writer warned towards complacency.
Talking at a London occasion marking the anniversary, Ron Kalifa, former CEO of fintech big Worldpay, who carried out the Treasury-commissioned evaluate, stated a part of the aim was to assist make “the UK the very best place on the earth to start out, to scale and to checklist a fintech enterprise”.
“At this time, I feel we are able to say with nice confidence that we have now made nice progress,” he stated. “Fintech has change into one of many UK’s most essential financial engines. It’s now not an concept on a whiteboard, it’s now not a promise of future development – it’s delivering right here and now.”
To place info behind his declare, he referenced the statistic that fintechs, or various lenders, now account for 60% of lending to UK small and medium-sized companies. “Meaning when a small enterprise in Manchester buys new equipment, or a startup in Birmingham hires their first worker, there’s a higher than ever probability that the capital is coming from a fintech platform,” stated Kalifa.
Creeping competitors
He stated the UK is the “world chief outdoors the US”, however warned that international locations such because the United Arab Emirates (UAE), which this 12 months briefly claimed second spot in fintech funding, and India, which is near reaching that place, are threats to the UK’s ambitions.
The UK regained second spot in 2025, after attracting $3.6bn in funding, in response to Innovate Finance figures. “We aren’t coasting on legacy, we’re competing. Management isn’t a trophy you placed on a shelf, it’s a place you defend on daily basis,” Kalifa warned. “Let’s simply face the arduous fact. We threat turning into the nation that invented open banking after which watched others commercialise it.”
He cited the UK’s failure to maneuver forward in open banking as a narrative to heed.
It was 2017 when the Competitors and Markets Authority’s Retail Banking Market Investigation Order meant UK banks had been required to implement open banking laws, which led to the event of utility programming interfaces (APIs), to provide customers extra management over their financial institution accounts.
The top aim was to extend competitors in a retail banking sector dominated by huge monetary companies corporations. Buyer banking knowledge is shared by the business by means of APIs, with prospects’ permission, enabling companies to supply tailor-made merchandise.
Open finance, as open banking’s subsequent section is commonly described, will see companies use APIs to share banking knowledge throughout extra companies, similar to mortgages and loans, and provide services from exterior organisations.
However Kalifa stated the roadmap for open finance, “as soon as the following chapter” of open banking, is “nonetheless ready to land”, and pointed to international locations similar to Brazil and India, that are shifting forward.
Chatting with Laptop Weekly final month, Chris Skinner, fintech business skilled and CEO at The Finanser, described open finance as “a little bit of a miss and hit affair”.
“A few of the issues that we have now seen by means of the open banking boards have confirmed that this could work,” he stated. “However there are additionally nonetheless teething troubles between totally different suppliers, notably when part of the system goes down.”
Kalifa additionally warned that digital ID, the foundational infrastructure for a contemporary monetary ecosystem, stays too slender and too gradual in its utility. “It’s, in some ways, as if we have now laid the rail observe and hesitated to run the trains on it.”
He stated within the world tech race, “hesitation is dear”.
