April 5, 2022

The state of open banking in Europe — in 4 charts

Financial flop or banking bop? Where open banking really stands in Europe


5 min read

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Just this year, open banking hit 5m users in the UK. While this is far behind experts’ predictions of where the tech would be, it’s still a significant milestone. 

Why does this matter? For Rolands Mesters, chief executive of open banking provider Nordigen, it’s about seeing use cases actualised. 

“Open banking is the ability for people to have more control over their bank accounts,” he says. “Closed banking means, if you have a bank account, you are at the mercy of your bank, you can only do the things that the bank has allowed you to do.


“But with open banking, your bank account is suddenly more valuable. You can use your bank account with third party applications, to track your finances, help you save and spend smarter. Moreover, with your consent, your bank account can make smart payments and smart payment decisions on your behalf.”

Open banking is the ability for people to have more control over their bank accounts

That’s the rosy picture of open banking — and the benefits promised will be for users, as well as businesses. But it still faces challenges, like regulatory roadblocks, security concerns and banks calling it a flop

So, how quickly has open banking really grown in Europe — and what does it look like? We crunched the numbers.

1/ Open banking users are picking up steam 

The number of active open banking users in the UK reached 5m this January, according to the Open Banking Implementation Entity (OBIE). Given the population of the UK with any type of day-to-day bank account is 47m, that means around 10.6% of the country’s banked population is using open banking.

“Four years ago, open banking was a concept in name only,” says Charlotte Crosswell, OBIE’s chair and trustee. “Today, more than 5m consumers and small businesses are benefiting from open banking enabled tools and this is only the start.” 

“It doesn’t seem like a lot, right?” says Mesters about the 5m mark. But, he tells Sifted, the speed at which the UK reached it is noteworthy; while it took 10 months to grow the number of users from 1m to 2m in 2020, it took four months to grow from 4m to more than 5m. 

Four years ago, open banking was a concept in name only

“For something so important, it seems the adoption rate is so low,” he says. “But this thing is compounding, so unless something drastically changes, we’re going to hit something like 8m people using open [banking] by the end of the year.”  

2/ Adoption varies across Europe 

While the UK hosts 5m users, the country is what you might call an open banking frontrunner. Open banking provider Yapily scored open banking adoption levels — based on 2021 data — on a “league table,” which you can see laid out in the heat map above. 

Yapily says: “Each country has been ranked based on levels of supervision and enforcement by the member state, the presence of open banking from a technical standard, regulator interpretation, API standards and bank readiness and overall product score.”

Due to widespread mandating, the UK scored a 10 out of 10 and was the leading adopter of open banking in Europe. Hungary and Romania, at the other end of the spectrum, were given a two, due to open banking being a low priority for regulators. 


However, there’s no official data for open banking user numbers across Europe, but Mesters estimates just 5-7% of Europeans have ever used open banking.

Adoption varies not only because of regulatory differences, but also the culture around payments. Mesters says open banking is picking up in the Baltics and the Nordics “because people are already used to making interactions with their bank accounts, as opposed to cards”. He also points to Spain and Germany as ones to watch, which scored a six and an eight on the league table. 

3/ Payments are accelerating open banking adoption

Boosting adoption — particularly in the UK — are payments enabled by open banking. McKinsey found most use cases created by fintechs and non-banks in the UK centred around payments. 

Mesters says open banking payments are also gaining momentum in the rest of Europe, but they are still a relatively new proposition, within the past year or so. Fast-growing fintechs like $5.3bn Plaid and $95bn Stripe are using open banking to facilitate payments in Europe.  

Crosswell agrees, adding that although payments are hot, other use cases are still heating up. 

Europe has 31 countries and every single country has their own credit bureau laws and credit data laws

“We’ve seen customer numbers grow significantly over the past few months and undoubtedly open banking payments are a huge factor in this growth,” she says. “There are some really innovative propositions being developed that will continue to benefit and transform government, retail and wider businesses in future.” 

For Mesters, lending is the next strongest use case after payments. He says open banking could make it easier for Europeans to study and work in different countries, without losing their credit history. 

“Europe has 31 countries and every single country has their own credit bureau laws and credit data laws,” he says. “Open banking is this pan-European standardised data set that is available for banks to make better credit decisions.”   

4/ Infrastructure providers are the missing link

Even though customer-facing propositions reign supreme in fintech, infrastructure providers are key for linking up banks to third parties. 

McKinsey found 30% of open banking licence holders in the UK are infrastructure providers — and this had a “multiplying effect” on market innovation, since these providers make it easier for other fintechs to launch products and services. 

So-called third party providers (TPPs), like Nordigen, also reduce friction by acting like “middlemen” and allowing fintechs to have access to an interface that matches their needs. In the UK, all TPPs must be licensed and registered with the FCA.

Lots of other countries have seen what the UK has done and are taking that model to their own country

“We are trying to reduce the barrier for open banking adoption,” says Mesters. “Open banking in Europe is regulated and free, which is great, but it hasn’t really been enough for open banking to take off as it was supposed to.”  

Crosswell says as more businesses adopt open banking — facilitated by the fintech ecosystem — the UK will be able to look beyond, to open finance and smart data. 

“Lots of other countries have seen what the UK has done and are taking that model to their own country,” she says. “But they’re also thinking beyond open banking too.” 

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