Open Banking Space 🪐 5 key trends in 2022

Neonomics
July 18, 2022
August 14, 2023
3 minutes

1. Adoption is accelerating

The Open Banking Implementation Entity announced that open banking payments grew at a tremendous rate of 500% year-over-year. At the start of 2022, we saw that open banking surpassed its 4 million users’ milestone in the UK. Shortly after, this bumped up to 5 million users, and in June 2022, open banking hit a new record in the UK, reaching 6 million users (a huge thanks to the UK government putting weight behind open banking by implementing a “Pay by bank” option for HMRC). This shows how open banking has come a long way since 2020, taking almost a year to go from 1 to 2 million users. The rise of alternative and digital payments during the pandemic is partly to thank for that, but also, we’re seeing that the younger generations are an important driving force behind open banking and alternative payments.  

2. Embedded finance and open banking are dominating the fintech scene

Embedded finance is the integration of financial services into the purchase experience of products or services of non-financial organisations, rather than being a separate part of the purchase experience. During this year’s long awaited Money20/20, we clearly saw open banking and embedded finance dominating this year’s event. You could even go as far as saying that it was the topic of the year, likely a consequence of the accelerating adoption and some key big players moving into the open banking space (see trend #5).  

3. Big savings for SME’s

Earlier this year, a report by Yolt shows that open banking could save the average SME online retailers over £19,000 a month in transaction fees, associated with credit cards by increasing the use of open banking technology. In addition to the costs saved through transaction fees, open banking can also help SME online retail businesses reduce incidents of fraud (where it’s estimated that SME’s lose an average of £4,257 a year). In addition to the savings that SME’s can benefit from open banking, both Visa and Mastercard announced to raise their credit card fees from April 2022. Although these fees were delayed due to the pandemic, globally we’re facing extremely high inflation and retailers may be forced to pass the additional costs on to their customers.

4. Shift towards design-led frictionless payments

Implementing open banking payments is all well and good, but when it comes to creating a frictionless experience with high conversion, having a design-led solution is what will set it apart. Great UX/UI in the payment flow will increase adoption and conversion, making the end-user feel like they have a secure, familiar and convenient solution, resulting in loyal customers for the business. At Neonomics, we’re putting UX/UI design at the forefront of our solutions, making sure we’re delivering open banking solutions that make a difference.  

5. Big players have been moving into open banking and embedded finance space

In March of 2022, we saw no one other than Apple move into the open banking space by acquiring Credit Kudos. We have already seen several global retailers, such as IKEA, Mercedes, Amazon and Walmart benefit from embedded finance in their business, yet many retailers are still missing out on this golden opportunity to leverage embedded finance as a competitive strategy.  

Open banking is thriving and businesses that embrace it early will benefit the most. Want to know how open banking can grow your business? Let’s talk! 👇

Book an intro with Barbara 🚀

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Open banking changed our lives, can it change yours?

Open Banking Space 🪐 5 key trends in 2022

1. Adoption is accelerating

The Open Banking Implementation Entity announced that open banking payments grew at a tremendous rate of 500% year-over-year. At the start of 2022, we saw that open banking surpassed its 4 million users’ milestone in the UK. Shortly after, this bumped up to 5 million users, and in June 2022, open banking hit a new record in the UK, reaching 6 million users (a huge thanks to the UK government putting weight behind open banking by implementing a “Pay by bank” option for HMRC). This shows how open banking has come a long way since 2020, taking almost a year to go from 1 to 2 million users. The rise of alternative and digital payments during the pandemic is partly to thank for that, but also, we’re seeing that the younger generations are an important driving force behind open banking and alternative payments.  

2. Embedded finance and open banking are dominating the fintech scene

Embedded finance is the integration of financial services into the purchase experience of products or services of non-financial organisations, rather than being a separate part of the purchase experience. During this year’s long awaited Money20/20, we clearly saw open banking and embedded finance dominating this year’s event. You could even go as far as saying that it was the topic of the year, likely a consequence of the accelerating adoption and some key big players moving into the open banking space (see trend #5).  

3. Big savings for SME’s

Earlier this year, a report by Yolt shows that open banking could save the average SME online retailers over £19,000 a month in transaction fees, associated with credit cards by increasing the use of open banking technology. In addition to the costs saved through transaction fees, open banking can also help SME online retail businesses reduce incidents of fraud (where it’s estimated that SME’s lose an average of £4,257 a year). In addition to the savings that SME’s can benefit from open banking, both Visa and Mastercard announced to raise their credit card fees from April 2022. Although these fees were delayed due to the pandemic, globally we’re facing extremely high inflation and retailers may be forced to pass the additional costs on to their customers.

4. Shift towards design-led frictionless payments

Implementing open banking payments is all well and good, but when it comes to creating a frictionless experience with high conversion, having a design-led solution is what will set it apart. Great UX/UI in the payment flow will increase adoption and conversion, making the end-user feel like they have a secure, familiar and convenient solution, resulting in loyal customers for the business. At Neonomics, we’re putting UX/UI design at the forefront of our solutions, making sure we’re delivering open banking solutions that make a difference.  

5. Big players have been moving into open banking and embedded finance space

In March of 2022, we saw no one other than Apple move into the open banking space by acquiring Credit Kudos. We have already seen several global retailers, such as IKEA, Mercedes, Amazon and Walmart benefit from embedded finance in their business, yet many retailers are still missing out on this golden opportunity to leverage embedded finance as a competitive strategy.  

Open banking is thriving and businesses that embrace it early will benefit the most. Want to know how open banking can grow your business? Let’s talk! 👇

Book an intro with Barbara 🚀

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Neonomics AS is licensed as a Payment Institution (PI), Payment Initiation Service Provider (PISP) and Account Information Service Provider (AISP), issued by the Norwegian Financial Supervisory Authority (Finanstilsynet) passported across the EU.