PSD2 turns seven: How Open Banking continues to shape the future of finance

We know that open banking is a crucial component of a modern financial ecosystem, and this year is particularly pivotal for its ongoing development. Why? This month marks the seventh anniversary of the implementation of PSD2 in the UK, the framework that underpins open banking in the European Union. In addition, we will see the Data (Use and Access) Bill progress through Parliament, further supporting and regulating open banking initiatives.

Given that this is a pivotal year for open banking, there are several critical factors the industry needs to focus on:

1. Supporting Regulatory Developments: Regulators play a critical role in shaping the future of open banking. Supporting the development and implementation of comprehensive regulatory frameworks, such as the Data (Use and Access) Bill in the UK I just mentioned, can provide a stable foundation for open banking to thrive. In addition, reviewing the need for the 90-day reconsent process is needed to stimulate more consumer benefits.
2. Investing in Technology, Standards and Infrastructure: Continuous investment in the standards of Open banking, technology and infrastructure is essential to support the scalability and efficiency of open banking systems. Organisations in the financial services industry should focus on adapting their IT systems and enhancing API capabilities.
3. Promote Consumer Awareness and Education: Since open banking is based on explicit consumer consent/reconsent, educating people about the benefits and functionalities of open banking is non-negotiable. The industry needs to continue to inform people about how open banking can enhance their financial management, provide personalised services, and improve their overall financial well-being.
4. Driving Collaboration and Partnerships: Collaboration between traditional banks, fintech companies, and other financial service providers is vital for the growth of open banking. By working together, the industry can develop innovative products and services that leverage the strengths of each company.

By focusing on these critical factors, we will see the further unlocking of the benefits open banking brings, particularly in transforming the customer experience and promoting financial inclusion. By democratising access to financial data, open banking has given individuals with limited credit histories to access financial services that were previously out of reach.

In addition, with the ability to securely share their financial data, consumers can access more personalised and efficient services. For example, loan approvals have become faster and more accurate, as lenders can quickly verify financial information through APIs. Our Experian Boost product is grounded in open banking, where, once we get permission to get connect to a bank account or other information like council tax payments, we will calculate an individual’s opportunity to boost their credit score.

Interestingly, the utilities sector is also using open banking to assess quickly and accurately if customers are eligible for social tariffs. This does away with the need for the customer to supply bank statements, as well as track any changes in affordability, so the customer can be supported in the most appropriate way.

In 2025, open banking stands as a critical pillar of the financial services industry. Its ability to drive innovation, enhance customer experience, and promote financial inclusion makes it indispensable for financial institutions. As we celebrate the seventh anniversary of open banking, it is clear its impact will continue to shape the future of finance for years to come.