Open Banking evolution — pt1

Gavin Starks
4 min readDec 15, 2021



This is the first in a series of posts that will map out where Open Banking came from, why and what it all means.

Open Banking represents one of the most significant step-changes in banking in a generation. There are now millions of people using it across dozens of countries.

As co-Chair of the original working group, I wanted to capture the context around its origins, look forward to where it’s all heading, not only in banking but across finance and into other sectors.

Enabling structured and trusted data sharing now demonstrably improves people’s banking experience. Whether helping customers find a mortgage more easily or helping banks find customers matched to a new product or businesses sharing data with their accountants, it improves operational efficiency, security, solidifies consumer rights, and enables new services to be created.

The value of an Open Standard and a standardised approach

An Open Standard brings to the fore the ability to connect with customers using internet-based technologies, including both the Web and via Apps, opening up the potential for innovation to existing and new actors.

The Open Banking Standard itself and the work that has been done by the UK’s Open Banking Implementation Entity (OBIE) to implement Open Banking is freely available, via open licences, to other countries that are interested in adopting Open Banking. The OBIE has done ground-breaking and replicable work around the authentication and consent model for customers, the liability framework and dispute resolution management protocols, and the Directory which is the central repository and means for access to all regulated market participants.

There is a strong rationale for countries to come together with the same approach, and potentially with international coordination via a global working group, to help coordinate efforts, reduce duplication, increase interoperability, minimise costs and maximise the benefits for the whole banking community. Embracing reciprocity is core to the cultural and practical norms of robust open development.

Banking products are digital products

Looking through a lens of ‘new opportunity’ we can draw parallels to businesses across other sectors that have had to adapt to ‘digital’ business models. The potential for innovation and efficiencies is material for both incumbents and new businesses, for governments and end customers. We must learn from our recent web history (whether publishing, media, telecoms or retail) that no sector is impervious to the kind of change that a federated internet can bring.

It is important to think of banking products as digital products. This may seem obvious, but while much of banking has been ‘computerised’ for decades, it has remained substantially analogue in many areas and it has not wholly embraced the design principles of digital-first and the web. We have, therefore, two concurrent trends. Firstly, we are digitising processes and activities that have been people-intensive. Secondly, we are changing the architecture of service design and delivery to enable it to act at web scale.

The power of collaboration amongst diverse stakeholders

In the creation of the Open Banking Working Group (OBWG), a key benefit of the UK’s initial approach was to seek collaboration between a broad range of stakeholders that represented this diversity. It may have seemed unusual to convene large banks and Fintech startups, trade associations and NGOs, regulators and government in the same project, however the outcome was one of high alignment, significant innovation and it generated substantial momentum.

Importantly, individuals did not represent their own organisations but were there as experts in their respective areas. In defining guiding principles and values, for example, ‘Open; Expert; Collaborative’, OBWG helped teams bring their expertise to the fore and focus on creating the ‘future of banking’ rather than ‘an increment from today’.

Open: Banking and Beyond

“Open Banking creates design patterns which can be replicated across other sectors”

Open Banking is a huge step forward in the data infrastructure that supports our digital economy. The development of open systems is both inevitable and will happen at pace as consumer gains and industry opportunities are evidenced.

Open Banking creates design patterns that can be replicated across other sectors. Our expectation is that Open Banking will not only continue to evolve and encompass the full range of Financial Services and apply to other sectors, with utilities such as consumer energy and telecommunications as logical extensions. It may be worth considering what a Fintech sector may look like if it were built from the ground up on a framework such as Open Banking.

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