Government adoption ‘most important’ ingredient for trust in open banking: UK fintech leader


Greater government adoption is the “most important” of all ingredients needed to ensure the number of people using open banking technology continues to rise in the UK, a fintech industry leader has said.
The UK is widely seen as a leading nation when it comes to developing an open banking ecosystem, spurred by the creation of its Open Banking Implementation Entity (OBIE: now more widely being referred to as Open Banking Limited – OBL) in 2016. There are just over 12 million open banking users per month (according to OBL’s December 2024 data). Its public sector has also blazed a trail in using open banking, with HM Revenue & Customs (HMRC), National Savings & Investments (NS&I) and the Department for Work & Pensions (DWP) among the public sector entities to have procured open banking technology.
But other nations are catching up, or indeed overtaking, the UK – at least in developing open banking ecosystems, if not (yet) public sector use. Sixty jurisdictions around the world have implemented open banking legislation or regulations, according to one heavyweight analysis published a couple of months ago.
Charlotte Crosswell OBE, who is chair of the UK’s Centre for Finance, Innovation and Technology (CFIT), was speaking about the opportunities and challenges for open banking’s continued growth in the UK specifically at the ‘Payments Regulation and Innovation Summit 2025’ in London on 21 January. She referenced examples of UK public sector entities using open banking technology as she discussed how to encourage awareness and trust of open banking among the public. “We need more of those [government] use cases,” she said.
“I don’t think trying to tell people about it [open banking] is the answer,” Crosswell said, in a part of the discussion on the communications challenge. “Obviously, government adoption of this is the most important piece. Are they [public sector] using it [open banking]? How do they use it? Because that’s the one [use case] that gives it that ‘trustmark’.”
OPEN BANKING & OPEN FINANCE: EXPLAINED Open banking is the process by which people share their banking data with third-party organisations (for example, fintech companies). Open finance is the same concept applied to a broader range of services such as insurance, investments and pensions. ‘Open’ specifically refers to open APIs: software intermediaries that allow two machines to interact.
‘Pay by bank’? ‘Account to account’?
HMRC created global government fintech history in March 2021 when it introduced a ‘Pay by bank account’ option for people making online self-assessment tax returns – believed to be the first time any government worldwide had used open banking to facilitate tax payments. The online button is labelled ‘pay by bank account’ as opposed to ‘pay by open banking’.
“Are we going to talk about ‘account to account’ [payments] or we going to call it ‘pay by bank’?,” Crosswell – a former chair and trustee of OBL who is currently also executive chair of data-sharing tech provider Raidiam (alongside her CFIT role) – asked rhetorically at last week’s event, referencing different terms used in the market.
“Let’s choose a brand and let’s just go with it, and that – again – has to be done centrally, otherwise people don’t know what it is,” she urged. “If one bank is using one brand, and another one [bank] is using another, you won’t get the recognition.”
Given that many people will not understand what open banking means – indeed ‘open’ is precisely the opposite of how most people would perceive their personal banking arrangements – government departments are alert to the need for caution in their external communications. At the Global Government Fintech Lab in 2023, HMRC’s head of open banking payments Rachel McLaren acknowledged “nervousness around that term” when asked how the department had promoted the ‘open banking’ payment option.
DWP’s use of open banking technology is narrower and also in a more sensitive policy area. The department last year engaged a fintech company (Ecospend – the same company also being used by HMRC and NS&I) to develop a proof-of-concept for a trial use of ‘Account Information Services’ (AIS) technology in the provision of Universal Credit (a government benefit). But ultimately it faces a similar external communications challenge. The department highlighted that the trial was run on an opt-in basis – that people needed to give their consent for the use of open banking to see their bank balances, among other messages meant to reassure benefits claimants.
FURTHER READING HMRC deepens open banking use with ‘account information services’ (4 October 2024) and UK’s DWP trials open banking technology for benefits claimants (13 August 2024) – two articles revealing how the two government departments mentioned in the above section are using open banking tech
Consumers need government reassurance
Crosswell was speaking on the topic of ‘Open Banking and Open Finance: the Future Direction of Payment Systems to Promote Competition and Financial Inclusion’ at the event, which was organised by conference company City & Financial Global. Her fellow panellists were Janine Hirt, chief executive of UK fintech industry body Innovate Finance; and John Mowat, head of strategic policy at Pay.UK (the operator and standards body for the UK’s interbank payment systems).
Hirt’s association included ‘promoting public sector adoption of open banking’ among its recommendations in a ‘FinTech Plan for Government’ published after the election of the Labour government last July. ‘Work by the Government Digital Service to extend Open Banking payments, successfully introduced by HMRC, to other government services is very welcome and a great way of developing consumer familiarity and trust,’ the 40-page document stated. ‘The government should set out a clear and ambitious plan for extending Open Banking payments to other government services and the wider public sector – such as the Driver and Vehicle Licensing Agency, Passport Office and local authorities,’ Innovate Finance urged.
During the discussion, Hirt highlighted references in the government’s ‘National Payments Vision’, published a couple of months ago (November 2024), to an ambition for open banking to become ‘ubiquitous’ as a payment method. “One of the easiest ways to encourage that confidence is to make sure that, ultimately, open banking is omnipresent, so when you go into shops you are able to utilise it,” Hirt said.
A drumbeat of government support is also crucial, however. “I also cannot underline enough how important it is that we continue to have the confidence of government being expressed around using open banking, so that consumers can hear that confidence coming from government, coming from the regulators, that this is a unique and beneficial tool to help give consumers confidence in their financial wellbeing,” she said.
Hirt had a similar view to Crosswell on terminology, wondering aloud whether ‘open banking’ was “the best term to inspire confidence by users” or whether “there potentially a different phrase that we could be using.”
“I think [that] to be ubiquitous, it [open banking] probably ultimately needs some kind of trustmark or brand,” Mowat said.
FURTHER READING UK fintech sector keen for ‘momentum’ on public sector open banking use (25 July 2024) and Public sector’s potential to drive open banking take-up highlighted at London event (17 October 2023) – two articles based on events during which UK fintech sector representatives discussed the public sector’s use of open banking
On accountability and urgency
The panel were asked for their views on the future governance arrangements for open banking – and open finance, its broader sibling concept – in the UK.
A Joint Regulatory Oversight Committee (JROC) was set up in 2022 to agree and implement steps towards the creation of a successor entity to OBIE/OBL. The National Payments Vision announced that the Financial Conduct Authority (FCA) would ‘act as the UK’s regulator in the future, ensuring effective engagement with other authorities as needed’. This will ‘support the pace of progress on core activities to agree a sustainable commercial model and consumer protections,’ the Vision stated.
The FCA and Payment Systems Regulator (PSR) issued a statement on the ‘next steps for open banking’ on 23 January 2025 (a couple of days after the discussion that this article is based on). These include the creation of a new ‘independent company to drive forward variable recurring payments [VRPs]’, which will see ‘live services available’ for consumers to make recurring payments to utility companies, government and financial services firms.
This will be welcomed. But nonetheless Crosswell cautioned that there remained a “huge amount of work” yet to be completed on “tidying up journeys” – a reference to customer experiences when using open banking. “We shouldn’t forget that as we race into the next phase [for open banking and open finance], which we have to be doing,” she warned. “But I don’t think that’s a reason to stop. Otherwise we’ll be sitting here in five years’ time and still waiting on ‘what’s the ‘future entity’ [successor to OBIE/OBL] going to called?’.”
Crosswell was keen for policymakers to have greater accountability for pushing things forward. “I think it’s a challenge for all of us. But who do we think wakes up every single day across government, across the regulators, and says ‘today I’m responsible for moving open banking and open finance forward, and if I don’t do that, I’ll get fired’?” she asked rhetorically. “I haven’t found that person yet. In the commercial world, that’s what would happen. We have to get the urgency into the system.”
FURTHER READING UK data bill starts journey to pave way for smart data initiatives (25 October 2024) and Beware policymaking ‘drift’: ex-UK minister warns on smart data progress (18 October 2024) – two articles on parliamentary (law-making) progress on smart data (data portability)
Open banking ‘gets pushed into corner’
Crosswell re-emphasised her point about stepping up the pace later in the discussion, urging government to have “someone working on” progressing open banking and open finance “full time, every day”.
“Obviously there are decisions being made in the very short term of what happens next on future entity design [successor to OBIE/OBL]. Deadlines are always good – we’ve been through a few of those before,” she reflected. “This has to be a priority for any minister, for officials. At the moment, there’s so many things that everyone has to work on [and] open banking gets pushed into this corner of this group of people that know about it and realise how powerful this can be. But I think it needs a ‘home’ and it needs an ‘owner’ [in government].”
Encouraged by the session’s moderator Rebecca Hickman, a partner at law firm Addleshaw Goddard, to suggest who that could be, she said: “For what it can deliver: for economic growth, for fraud, for looking at data, for using that [data]… it’s got to be someone at the most senior level in government, this is more on the officials side, but it needs to have a ministerial sponsor.”
“I think if you asked any CEO of any bank or any minister [for their] top 10 priorities for 2025, unfortunately, I’m not sure open banking would feature,” she added. “But for what that’s going to power – the smart data economy – we have to get this right, if [we] want to unlock the next phase of growth and the next lot of innovation. Fintechs [companies] can’t develop solutions if they don’t have access to data to drive those forward.”
Following the National Payments Vision, a ‘Payments Vision Delivery Committee’ (PVDC) is being set up. This will be chaired by HM Treasury’s director-general for financial services and financial stability, with membership comprising: the Bank of England’s deputy governor for financial stability; FCA chief executive; and PSR managing director.
Mowat referred to the PVDC in picking up the discussion thread. “Whether it’s a ministerial response, or it’s the PVDC, or whatever it is, it needs to be sufficiently powerful to cut through the current transition period,” he said (a reference to the shift to new open banking governance arrangements). “Purely from a Pay.UK perspective, that should then drive demands for upgrades in the central infrastructure that could then facilitate a lot of this stuff,” he added.
RELATED ARTICLE UK ‘National Payments Vision’ aims to tackle regulatory ‘congestion’ – a news story (15 November 2024) on the Vision’s publication
‘Only just scraped the surface’
The panel were asked whether they felt that open banking’s rollout in the UK had met its objective to improve competition in financial services “by democratising access to payments data”.
“If I’m being provocative to your provocation, I would say, ‘no, it hasn’t’,” Crosswell said, going on to make comparisons with the rapid expansion in public use of India and Brazil’s internationally well-known and well-regarded instant payments systems. “When we set out on this journey [to make open banking a reality in the UK], I think the vision for what opening banking would do was very different to where we are today, and that’s just because it’s really hard – we were dealing with legacy systems [in the banks]. As much as we would love to work at the pace of [India’s] UPI and [Brazil’s] Pix, it’s not that easy when you are working across incumbent institutions.”
The nine largest banks and building societies in Britain and Northern Ireland (known as the ‘CMA9’ after the Competition & Markets Authority – the CMA) that have been required, since 2017, to fund OBIE/OBL (via what was known as the ‘CMA Order’). Crosswell reflected that “no-one was particularly popular in open banking teams with the [CMA9] banks” because of the “back-end” technical costs. This had echoes of a point made by a CMA9 bank senior representative at an event attended by Global Government Fintech in London in October. NatWest’s Stephen Wright described open banking in the UK as having a “good foundation” but questioned whether it could be described as a “success”. Wright criticised the costs. “Open banking, if you add everyone together, probably cost the best part of £2 billion [about $2.6bn] to deliver [in the UK],” he told the audience during a panel discussion at the Open Banking Expo event.
“Roll forward to where we are now [and] I think we are much more back at that vision of ‘what was this actually [for] and where we going?’,” Crosswell continued. “Perhaps without that painful journey we wouldn’t have got to where we are today. Has it to created more competition on the high street? It’s definitely created choice. It’s brought more transparency. Has it helped people get mortgages [by] taking out the administrative burden? Absolutely. But has it fulfilled its potential? I would say [that] if we look back in 10 years’ time to where we are today, we’d say that, in 2025, we’d only just scraped the surface.”
Global Government Fintech’s Open Banking / Open Finance topic section
Evolving ambition

“It’s obvious to see the benefit of open banking, and we can see the benefit of open finance down the road,” Hirt responded, when asked whether the “investment” (largely by the banks) in open banking had been worthwhile. “Has the full potential of open banking been realised? Absolutely not.”
“I’m relatively frustrated being in these conversations because they are discussions that we’ve been having over and over and over again about how we progress an initiative that will have such a positive benefit to the industry and to the ecosystem and, more importantly, to the people on the street,” she continued.
“I believe everyone is actually working to try and move in the same direction,” she said, hailing the recent publication of the National Payments Vision. “But the time is now. We have seen other countries, other regions, moving ahead of where we are, and we need to be all pulling together in the same direction.”
“Has the investment been worth it? Well, actually, I think the question, what I would say, is, in five years’ time, has it been worth it? Because that’s [when] we’re going to see the progress,” she added.
Mowat said that expectations of what open banking can achieve had become “a lot more ambitious” than when the CMA Order was devised, referencing recent official publications including the National Payments Vision. “The ambition is [ultimately] to create an alternative to [payment] cards that is able to compete with Visa and Mastercard, and I think that that is a long way from the original CMA Order,” he said.
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Data fragmentation challenges
On the topic of how open banking and open finance can help with financial inclusion, Crosswell described challenges associated with everyone’s personal financial data becoming increasingly ‘fragmented’.
“When I opened my first bank account, there was an individual who you could go and see [in a bank] and who would have a complete overview of your financial life,” she explained. “In the pursuit of competition and transparency we have fragmented everyone’s data over many, many different financial providers, and it’s not all been ‘put back’ [together] again. So, the challenge we have with the most vulnerable in society is that even if they have some type of [financial] track record, it may not be feeding through to their credit score anymore, it may not be feeding back to that financial provider.”
CFIT has worked with Citizens Advice on developing a proof-of-concept project showing how open finance could enable people to access affordability assessments and advisors to obtain a comprehensive overview of someone’s financial information via a single dashboard. “They [Citizens’ Advice] have to manually sift through 600 data-points for every individual to try to get them back on their feet,” Crosswell summarised. “We work with them on automating 540 of those data-points and creating [the] dashboard. That isn’t even new data – that’s existing data. The challenge is how we capture all these data-points to try to help those who need it.”
“In this race to fragment and compete, we’ve got to make sure that we find different solutions for those who most need it in society and, to a certain extent, help debt agencies as well because they don’t have people who are able to automate this,” she continued. “So, how do they build it? Trying to go to banks and saying ‘Can you give me some of your CSR [corporate social responsibility] budget to help on this?’ isn’t going to be a tangible solution.”
“So I think this is where government does play a role,” she continued. “It’s very difficult to outsource that problem to the private sector because generally private sector isn’t going to make it financially viable themselves, and therefore they are they going to give it the most attention? No.”
RELATED READING How can open banking be useful to governments (and the public sector)? – check out our short guide (most recently updated on 20 December 2024)
Digital and financial education: don’t wait
Given the increasing prominence of online banking, the panel were asked about the importance of digital literacy. “I think if you wait for financial education [to help people], then you’re going to be too slow,” Crosswell responded. “So, I think, to a certain extent, we’re going to have to find the way of educating the educators, rather than [going] straight down to the end person.”
“A lot of people don’t trust the system – they want to be ‘off the grid’, they still want to use cash,” she continued. “What do we do with that? Cash doesn’t give you a credit record. So, I fear that if we put it back onto the poorest and most vulnerable and say ‘it’s your problem, you have to go and learn about this through financial literacy’, I fear we won’t get there, I’m afraid.”
Hirt highlighted the government’s ‘mission’ to boost economic growth. “I want to zoom out on a broader picture and look, for example, at this government’s commitment around growth and the absolutely critical role that fintech plays in terms of driving that growth across the economy,” she said.
Innovate Finance’s FinTech Plan for Government totalled up about £328 billion (about $408 billion) in GDP contribution to the UK economy if the fintech sector is “properly supported”.
“We have to be continuing to invest, continuing to collaborate, if we are going to cement the UK’s leadership in financial services, in fintech, but also more broadly, to drive that growth that this government is so intent on, which will give us that inclusion and that [financial] wellness as well,” she said.
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