Payment Talks | The Fragmented Adoption of Open Banking

Our Chief of Product, Marijke Koninckx recently sat down with Peter Theunis, Head of Payments at EMEA to discuss the adoption of Open Banking on an episode of Payment Talks.

Tell us about BankiFi

MK: “We [BankiFi] are a technology provider, we work with banks to make sure they elevate their small business banking offering, from something that is purely transactional to a true embedded banking offering."

PT: What does BankiFi mean when you talk about embedded banking?

MK: "If you look at the world through the lens of a small business, they need some banking products, but managing their businesses is about much more than that. It also involves things around invoicing, accounting, etc. What we do is we provide banks with the technology to bring that into their existing channels.”

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PT: What are your views on the open banking global trends and activities?

MK: “If you look at the way the market is set up at the moment, I think we're already above 60 countries that have adopted open banking in some way. Some of these initiatives are very much regulatory-driven, such as PSD2 in Europe and UK open banking.

In other markets, you see that it's really the market that has picked up the notion of open banking. Where both the banks and the financial service providers see the need and the usage of open banking use cases like in the US there's no regulatory involvement at this point but it's purely stemming from the need to innovate and be able to deliver better services much quicker.

So when you look at all those different initiatives, the scope, the timeline - whether it's regulated or not is vastly different.”

Open Banking in 2022

MK: “If you look at where open banking stands today, it's actually quite impressive. There was an announcement that open banking has reached about 5 million users, and I believe that over 26 million payments have been made on the open banking rails last year.”

It's not something that's happening in a niche somewhere anymore. It's really become more widely adopted and when you look at what's to come for the UK, there are some really exciting things ahead. Such as the markets are going to adopt variable recurring payments, which I think is going to be a game-changer when it comes to providing alternatives to products like direct debits or cards.”

“In Europe, I would say things are still very fragmented. The adoption is still slightly disappointed. Hopefully, there will be some more collaboration between different parties in European markets to accelerate the adoption of open banking. What I also think is very interesting is to look at what is happening in Australia.

The scope of open banking is actually much broader. It's not just about being able to access transactions on a bank account, but also other things like energy, utility companies etc are all brought in scope and I think that's a very interesting evolution.”