Open Banking in the UK: What to Expect by 2026

Table of Contents

• 1. Open banking set to expand significantly by 2026
• 2. Understanding Open Banking in the UK
• 3. The Regulatory Framework Behind Open Banking
• 3.1 The Role of the Competition and Markets Authority
• 3.2 FCA Regulations for Open Banking Providers
• 4. User Adoption and Market Growth
• 5. Practical Applications of Open Banking
• 5.1 Budgeting and Financial Management Tools
• 5.2 Payment Innovations and Direct Bank Transfers
• 6. The Future of Open Banking: Trends and Developments
• 6.1 The Role of the Joint Regulatory Oversight Committee
• 6.2 Emerging Technologies and Consumer Impact
• 7. Challenges and Risks in Open Banking
• 8. The Future of Open Banking in the UK: A Transformative Journey

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Open banking set to expand significantly by 2026

• UK open banking has moved from a regulatory experiment to mainstream infrastructure, with 16.5 million active user connections by December 2025.
• Open banking payments hit 351 million in 2025 (up 57% year-on-year), with VRP “sweeping” volumes nearly doubling.
• Regulation is shifting from “connectivity” to “reliability and scale,” including a transition from OBIE toward a new “Future Entity” under JROC oversight.
• The next frontier is open finance and Smart Data Schemes, enabled by the Data (Use and Access) Act 2025.

UK Open Banking Momentum 2025

Understanding Open Banking in the UK

Open banking in the UK lets consumers and businesses securely share bank account data with FCA-regulated third parties through standardised APIs—but only with explicit consent. In practice, it means a customer can allow an app to read account information (to analyse spending, for example) or initiate a payment directly from a bank account, without handing over card details.

In UK regulatory terms, these two functions typically map to Account Information Service Providers (AISPs) (read/aggregate data) and Payment Initiation Service Providers (PISPs) (initiate payments), and access is designed to be permissioned and revocable.

AISP and PISP Consent Journey
AISP vs PISP (and what the consent journey usually looks like)

• AISP (Account Information Service Provider)
• What it does: reads/aggregates account data (balances, transactions) to provide insights.
• Common outcomes: budgeting views, affordability checks, income verification.
• PISP (Payment Initiation Service Provider)
• What it does: initiates an account-to-account payment from your bank account.
• Common outcomes: pay-by-bank checkout, bill payments, some recurring payment flows.

Typical consent flow (high level):
1) You choose a feature (e.g., “connect your bank” or “pay by bank”).
2) You’re redirected to your bank to authenticate.
3) You see what data/payment access is being requested and approve it.
4) The third party receives a permissioned token and can only act within that scope.
5) You can revoke access later (often in-app and/or via your bank).

The UK’s model is often described as “mandated” open banking because it was driven by competition policy, not just industry choice. The Competition and Markets Authority (CMA) required the largest current account providers to open up access via common technical standards, helping create an ecosystem where fintechs and banks can interoperate.

By 2026, open banking is no longer limited to niche personal finance apps. It underpins everyday journeys such as affordability checks using real transaction data, mortgage income verification, debt advice tools, and savings platforms that can move money based on spending patterns. While many consumer services are mobile-first, some open banking experiences can be accessed through a desktop browser.

Crucially, open banking is not the same as open finance. Open banking focuses on bank accounts and payments; open finance would extend similar data-sharing principles to areas like pensions, investments, insurance, and mortgages—a direction UK regulators are now actively developing.

The Regulatory Framework Behind Open Banking

The UK’s open banking framework is built on a combination of competition remedies and financial services regulation. The CMA mandate created the obligation for major banks to provide access via APIs, while the FCA supervises the third parties that connect to those APIs and deliver services to end users.

By 2026, the regulatory conversation has broadened. Open banking is increasingly treated as part of a wider “trusted data sharing” agenda—one that includes not only financial services, but also cross-economy initiatives designed to improve competition and consumer outcomes.

A major milestone was the Data (Use and Access) Act 2025, which established a legal foundation for Smart Data Schemes. These schemes aim to replicate open banking-style portability and interoperability in sectors such as energy, telecoms, transport, and retail. The intent is to enable secure sharing of data (under defined standards and access conditions) to support switching, comparison, and innovation.

At the same time, the UK is preparing for the next stage of financial data sharing. The FCA has committed to publishing an Open Finance roadmap by March 2026, signalling a move beyond current accounts into a broader set of financial products and datasets.

Roles and Failure Points
Who does what (and where things can fail in practice)
1) CMA (Competition and Markets Authority) sets the original remedy (2016) requiring the largest banks to enable standardised access.

• Checkpoint: mandated scope is clear (which banks/products are in-scope).

2) OBIE (Open Banking Implementation Entity) delivers the technical standards and implementation guidance that make interoperability possible.

• Checkpoint: standards are consistent enough that a fintech can integrate once and scale across banks.

3) Banks/ASPSPs build and operate the APIs and customer authentication journeys.

• Common failure point: inconsistent API performance/uptime or uneven user journeys across banks.

4) FCA regulates third parties under the Payment Services Regulations 2017 (e.g., AISPs/PISPs) and supervises conduct/security expectations.

• Checkpoint: firms are authorised/registered and consent/security controls are implemented as designed.

5) JROC (Joint Regulatory Oversight Committee) (from 2022) oversees the next phase—especially reliability, payments expansion (e.g., VRPs), and the transition toward a Future Entity.

• Checkpoint: governance and funding support “run the rails” responsibilities (resilience, dispute expectations, ecosystem change control).

6) Smart Data Schemes (enabled by the Data (Use and Access) Act 2025) extend the trusted-data-sharing model beyond banking.

• Common failure point: fragmentation if sectors adopt incompatible standards or certification approaches.

The Role of the Competition and Markets Authority

The CMA’s role is foundational: in 2016, it mandated open banking as a remedy to improve competition in UK retail banking. That mandate required the nine largest UK current account providers—including Barclays, HSBC, Lloyds, NatWest, Santander, Nationwide, and three others—to support standardised access to account data and payment initiation.

Implementation was delivered through the Open Banking Implementation Entity (OBIE), which set the technical standards that made interoperability possible. This standardisation mattered: without common APIs and shared rules, “data sharing” would have risked becoming a patchwork of bespoke integrations that only the largest players could afford.

The CMA’s approach also shaped the UK’s global reputation. The UK was among the first countries to introduce a mandated open banking framework, and that early start helped create a large ecosystem of apps and infrastructure providers.

By 2026, the CMA’s original competition logic still echoes through the market: open banking is expected to keep lowering barriers for new entrants, enabling more choice in budgeting tools, lending, and payments—provided the ecosystem remains reliable and trusted at scale.

FCA Regulations for Open Banking Providers

While the CMA compelled banks to open access, the FCA regulates the firms that use it. Under the Payment Services Regulations 2017, open banking providers are authorised and supervised as either:

• Account Information Service Providers (AISPs), which access and aggregate account data (with consent), or
• Payment Initiation Service Providers (PISPs), which initiate payments directly from a bank account (again, with consent).

This regulatory perimeter is central to trust. It creates a framework for how third parties handle sensitive financial data, how they manage authentication and consent, and how they operate securely when connecting to bank APIs.

As open banking expands in volume and importance, regulatory scrutiny is intensifying around practical safeguards: granular and revocable consent, robust API security, and governance that can support AI-driven decisioning without undermining fairness or transparency.

In parallel, the UK’s Smart Data direction adds another layer: the Data (Use and Access) Act 2025 enables sector-specific schemes with requirements around technical standards, certification and compliance, and independent audit—all aimed at making trusted data sharing scalable beyond banking.

User Adoption and Market Growth

Open banking adoption in the UK has accelerated from early adopters to mainstream usage. By December 2025, there were 16.5 million active open banking user connections, described as nearly one in three UK adults (36% year-on-year growth). Earlier figures show the trajectory: by 2024, open banking services had already reached over 11 million active UK users.

Usage growth is also visible in payments. In 2025, UK open banking payments rose 57% year-on-year. Estimates point to continued expansion into 2026, with projections of more than 400 million payment transactions and more than 17 million active users.

Market sizing varies depending on what is counted—apps and services alone, or the broader infrastructure stack. One estimate values the UK open banking market at USD 14.08 billion in 2025, rising to USD 16.12 billion in 2026. Broader estimates that include infrastructure and platforms put the UK market at USD 40.3 billion in 2025, with a projected 27.7% CAGR through 2034. Europe, led by the UK, is estimated to account for over 40% of global market share.

The competitive landscape reflects this momentum. The UK market includes banks, fintechs, and infrastructure specialists such as Plaid, Tink (Visa), TrueLayer, Yapily, SaltPay, GoCardless, and Token.io. Their differentiation increasingly hinges on reliability, compliance, and the ability to embed open banking into real customer journeys—checkout flows, lending decisions, onboarding, and recurring payments.

UK Open Banking Growth Metrics

Practical Applications of Open Banking

Open banking’s value is easiest to see in what it enables: practical services built on secure access to bank data and the ability to initiate payments. By 2026, the ecosystem supports thousands of apps and integrations spanning personal finance, lending, and merchant payments.

For consumers, the headline benefits are convenience and control: seeing multiple accounts in one place, automating savings behaviour, and proving income or affordability without paperwork. For businesses, the benefits often show up as lower payment costs, faster settlement, and better underwriting signals.

Two categories dominate real-world usage: account information (data aggregation and analysis) and payment initiation (account-to-account payments). Both rely on explicit consent and standardised APIs, but they solve different problems—one is about insight, the other about moving money.

Open banking also plays a role in financial inclusion and access. When lenders can assess affordability using real transaction data rather than relying on paper documents, it can streamline decisions and reduce friction—though outcomes still depend on how models are designed and governed.

Real-World Open Banking Uses
Where open banking shows up in real life (quick scan)

• Budgeting & account aggregation: see multiple accounts in one place; categorise spending.
• Affordability checks & lending: use transaction history to support faster, more accurate decisions.
• Income verification (e.g., mortgages/tenancy): reduce document back-and-forth by using bank-verified inflows.
• Debt advice & money guidance: build a clearer picture of essential outgoings and commitments.
• Pay-by-bank (A2A) at checkout: initiate a bank transfer without card details.
• Variable Recurring Payments (VRPs): more flexible recurring transfers (not just fixed direct debits), including “sweeping.”

Tip: When evaluating an app, look for clear consent screens (what’s accessed, for how long) and an obvious way to revoke access.

Budgeting and Financial Management Tools

Budgeting and financial management is one of open banking’s most established use cases. With user consent, apps can aggregate multiple bank accounts into a single view, helping people understand spending patterns, track subscriptions, and monitor cash flow without manually exporting statements.

This same data access supports adjacent services. Debt advice tools can use transaction histories to build a clearer picture of income and essential outgoings. Savings platforms can move money automatically based on spending patterns—effectively turning behavioural insights into actions, such as sweeping spare cash into savings after bills are paid.

Open banking data is also used for verification tasks that used to be slow and document-heavy. Mortgage income verification and affordability checks can be supported by real transaction data, reducing reliance on payslips or scanned PDFs.

The common thread is not just “more data,” but more timely data. When analysis is based on current account activity rather than static snapshots, tools can become more responsive—flagging changes in spending, identifying emerging risks, or prompting users to adjust budgets in near real time.

Payment Innovations and Direct Bank Transfers

Payment initiation is where open banking increasingly intersects with everyday commerce. Instead of paying by card, users can authorise a direct bank transfer from their account—often described as account-to-account (A2A) or “pay-by-bank.” For merchants, the appeal is straightforward: lower fees than card networks and the potential for faster settlement.

The scale is already significant. Projections suggest more than 400 million payment transactions in 2026. This growth is reinforced by innovation in recurring payments, particularly Variable Recurring Payments (VRPs). VRPs allow more flexible, API-driven recurring transfers, and “sweeping” VRP volumes nearly doubled (+98%), indicating rising adoption for both consumer and business scenarios.

The ecosystem includes specialist providers building these flows into checkout and billing experiences. Examples of companies active in pay-by-bank and payment initiation include Stripe, Token.io, TrueLayer, and GoCardless, with VRP featuring prominently in commercial roadmaps.

As A2A grows, the strategic question becomes less “can we connect?” and more “can we make it reliable and dispute-resilient enough to be a default payment method?” That shift is a key theme of the UK’s next phase.

The Future of Open Banking: Trends and Developments

By 2026, open banking is evolving from a compliance-led connectivity layer into a platform for embedded, automated financial services. The direction of travel is clear: more use cases, more volume, and broader data-sharing frameworks that extend beyond banking.

Two developments stand out. First is governance: regulators are reshaping oversight to improve ecosystem resilience and delivery of new capabilities like VRPs. Second is technology: cloud and AI are becoming core to how open banking services are deployed, secured, and personalised.

Cloud adoption is already material. Cloud-based solutions account for over 52% of open banking deployments in the UK, reflecting the operational need to scale API traffic, manage uptime, and support continuous delivery.

Meanwhile, the UK’s Smart Data agenda signals that open banking’s design principles are being exported to other sectors. The goal is interoperability without fragmentation, backed by certification, compliance, and audit requirements.

Open Data Landscape to 2026
What’s changing as we head into 2026 (practical context)

• Governance: OBIE is transitioning toward a Future Entity under JROC oversight, with a stronger focus on reliability and payments outcomes.
• Capability: VRPs are a priority area as the ecosystem moves from “connectivity” to “consumer-grade payment journeys.”
• Scope expansion: The FCA’s Open Finance roadmap (due by March 2026) signals movement beyond current accounts toward broader financial datasets.
• Beyond finance: Smart Data Schemes (enabled by the Data (Use and Access) Act 2025) aim to apply consent-driven data portability to other sectors.
• Technology baseline: Cloud and AI adoption is rising, increasing the need for strong data governance and security-by-design.

The Role of the Joint Regulatory Oversight Committee

The Joint Regulatory Oversight Committee (JROC), established in 2022, is overseeing the next phase of UK open banking. Its remit includes advancing Variable Recurring Payments (VRPs) and shaping the path toward broader open finance.

A central structural change is the transition of the OBIE into a new “Future Entity” with a stronger mandate focused on payments, data reliability, and ecosystem resilience. This reflects a maturing market: once basic connectivity exists, the priority becomes operational robustness—consistent performance, clear rules, and the ability to support high-volume, consumer-grade payment journeys.

JROC’s work also sits alongside the FCA’s commitment to publish an Open Finance roadmap by March 2026. Together, these signals suggest a coordinated push: improve the plumbing of open banking while preparing to extend trusted data sharing into more financial products.

In practical terms, this governance shift matters to everyone in the chain—banks maintaining APIs, fintechs building customer experiences, and merchants relying on pay-by-bank flows. Reliability and standardisation are not abstract goals; they determine whether open banking becomes “nice to have” or truly default infrastructure.

Emerging Technologies and Consumer Impact

Open banking’s next wave is being shaped by two technology forces: AI and cloud. Cloud is increasingly the default deployment model, supporting scale and resilience; AI is being integrated for risk management, personalisation, and process automation.

But the consumer impact depends on governance as much as capability. As data sharing expands and AI-driven decisions become more common, scrutiny is rising around data protection, consent management, cybersecurity, and AI qualities such as fairness and explainability. The more open banking is embedded into lending, onboarding, and payments, the more these issues move from “policy” into everyday outcomes—who gets approved, how quickly, and on what basis.

The UK’s Smart Data Schemes add another dimension. The Data (Use and Access) Act 2025 enables trusted data sharing beyond finance, with an emphasis on interoperability to avoid fragmentation. If executed well, consumers could see more seamless switching and comparison experiences across sectors—built on the same consent-driven logic that made open banking workable.

Economically, Smart Data has been projected to drive £10–30 billion in growth. That figure is not a guarantee, but it signals the scale of ambition: open banking is becoming a template for how the UK wants data portability to work across the digital economy.

Challenges and Risks in Open Banking

Open banking’s growth brings a predictable set of risks: operational complexity, uneven implementation, and the constant pressure to maintain trust while scaling.

One challenge is technical and operational. Meeting the requirements of Smart Data Schemes—and, eventually, open finance—demands investment in data standardisation, API development, and security infrastructure. The UK’s push for interoperability is partly a response to a real risk: fragmentation. If sectors or firms implement incompatible standards, the cost of integration rises and smaller innovators get squeezed out.

Another challenge is regulatory pacing. The UK has a robust legislative direction, but outcomes depend on the detail and timing of secondary rules—especially as data sharing expands beyond banking into other sectors. Firms building products on top of these frameworks must stay adaptable.

The biggest long-term risk is trust erosion. As open banking expands, so does the attack surface. Regulators and market participants are increasingly focused on granular, revocable consent, strong API and cybersecurity standards, and responsible use of AI—covering transparency, fairness, and data sovereignty. If consumers feel they cannot control access, or if high-profile security failures occur, adoption could stall even as the technology improves.

Finally, there is a market-structure risk: as open banking becomes infrastructure, reliability expectations rise to the level consumers associate with card payments and online banking. The next phase will be judged less on novelty and more on uptime, dispute handling, and consistent user experience.

Key Risks and Mitigations

The Future of Open Banking in the UK: A Transformative Journey

Navigating the Evolving Landscape

By 2026, the UK’s open banking story is no longer about whether data can be shared—it’s about how well the ecosystem performs under mainstream demand. With 16.5 million active user connections and hundreds of millions of payments, open banking is operating at a scale that forces hard questions about resilience, standards, and governance.

The regulatory direction is also widening. The rise of Smart Data Schemes suggests open banking is becoming a model for trusted data sharing across the economy, not just within finance. Meanwhile, the FCA’s planned Open Finance roadmap points to a future where more financial products become interoperable in similar ways.

Embracing Innovation and Collaboration

The next gains will likely come from collaboration: banks maintaining high-quality APIs, fintechs building usable products, and regulators ensuring the rules keep pace with real-world risks. Payment innovation—especially A2A and VRPs—is

What Drives Mainstream Adoption
A practical closing lens: what tends to decide “mainstream” vs “niche”

• Reliability beats novelty: if pay-by-bank fails at checkout, users revert to cards.
• Consent UX is product UX: clear, revocable permissions reduce drop-off and complaints.
• Disputes and fraud handling are adoption levers: predictable support paths matter as much as faster settlement.
• Standards + governance enable scale: without consistent rules and change control, integrations become brittle.

This perspective is informed by Martin Weidemann’s work building and scaling payment and regulated-fintech systems, where API reliability, consent flows, fraud/chargeback dynamics, and dispute handling tend to determine whether new payment rails become truly mainstream.

This article reflects publicly available information and widely reported UK open banking metrics as of 2026. Some figures are operational measures (such as “active connections”) and may not correspond 1:1 with unique users. Roadmaps and regulatory structures may change as new rules and implementation details are published.