UK Open Banking adoption and integration into the financial ecosystem remains steady with over six years of ongoing developments.
CI recently received insights regarding open banking and its “transformative” potential as payments via this method become more widely recognized.
Saturday 13th January marked the sixth anniversary of the launch of the Second Payment Services Directive (PSD2) in the United Kingdom.
Todd Clyde, CEO at Token.io, has commented on how the transformative potential of UK Open Banking is becoming more widely acknowledged amongst consumers, merchants, and payment companies.
In statements shared with CI, Todd Clyde, CEO, Token.io, said:
“As Open Banking celebrates its 6th birthday in the UK, its transformative potential in payments is becoming more widely recognized amongst consumers, merchants, and payment companies. Consumers will come for the incentives and stay for the user experience. Merchants will come for the savings and stay for the success rates; bypassing intermediaries with significantly lower transaction costs. And payment companies have two key drivers; they will come to meet merchant demand and stay for better margins and they will be lured by the cutting-edge technology and stay for a hands-on partnership to achieve success and sustainable growth.”
He added that through effective collaboration and “the implementation and widespread adoption of commercial Variable Recurring Payments (cVRP), the UK will be able to solidify its status in the evolving world of Open Banking and celebrate many more anniversaries to come.”
In simple terms, Open banking refers to the use of APIs in order to share financial data and services with authorized third-parties.
Third-parties often provide technology, a service or some sort of app to the banking institution’s clients that makes use of the shared financial data and services (with the consent of the customer).
Although open banking aims to enhance financial services and empower consumers, it is not without its risks. For instance, if the third party experiences some type of hack or security breach, then the customer’s sensitive details might get compromised and end up in the hands of criminals and/or bad actors. This very real possibility sheds light on some of the most serious concerns with open banking, which include: major privacy breaches, data security issues, as well as cybercrime and fraudulent activiities.