With open banking gaining in popularity globally, the UK, Germany and Sweden continue to lead the way in implementing the concept in Europe, a new report has revealed.
The “Europe Open Banking and Market trends 2023” report by Research and Markets found that that the UK open banking market, which was established in 2017, currently has the highest maturity with a large part of the population expected to use open banking by September 2023.
In Germany, such services have also grown considerably due to the implementation of regulations such as PSD2. As of June 2022, Germany had the second-highest number of third-party providers within the European Economic Area region. More than two-thirds of its home-regulated third-party providers deliver both Account Information Service and Payment Initiation Service, a share which is lower for the European Economic Area region.
Although Europe is a mature open banking market, the growth trajectory differs across countries in Europe. The report notes that other countries such as France, Lithuania, and the Netherlands are making improvements to their API standards, focusing on consumer awareness, regulatory framework and monitoring and enforcement of open banking. Yet, the same growth patterns are not being witnessed across all countries in Europe.
Finland for instance, secured a low score in the open banking maturity league as of 2022, mainly because the nation lags in standardising APIs and improving bank uptimes. Despite this, it is an attractive fintech destination and is a part of the P27 initiative which is a real-time payment system in the Nordic area.
“Similarly, Latvia and Iceland also performed poorly in the open banking maturity league,” Research and Markets said.
“In Iceland, the central bank needs to offer minimum standards and expectations on how open banking implementation should take place. Although Iceland lags in terms of developing an open banking infrastructure like its European counterparts, the growing fintech ecosystem is likely to push the growth of open banking in the country.”
