While London is viewed as the centre of open banking within the United Kingdom, a visit to Wales has shown the sector is also thriving outside the capital.
Open Banking Ltd (OBL) participated in Credit Week in Wales and joined several speakers to discuss the future of open banking. The panel focused on variable recurring payments, a pioneering payment instruction that lets customers safely connect authorised payment providers to their bank account to make payments on their behalf in line with agreed limits.
The Welsh economy benefits from a fast-evolving Fintech ecosystem with a corridor of innovation across the nation. Thanks to the collaborative approach taken by regulators and industry players in the UK, investment in the Welsh fintech sector has grown by 300% since 2022, a game-changer for consumers and small businesses, says OBL.
OBL’s Senior Policy Lead, Richard Koch, attended and spoke at Credit Week and said:
“Open banking is securely and simply helping businesses manage their finances more effectively, becoming more resilient, productive, and profitable in the process.
“It’s fostering innovation and growth, and Wales is a perfect example – seeing the fastest growth in financial and related professional services output in the UK between 2010 and 2020.”
Another key topic discussed during the panel was the role of open banking in facilitating financial inclusion. One of open banking’s most significant achievements has been to support financial inclusion, expanding access to financial products and services to historically underserved consumers.
Looking specifically at how Open Banking facilitates fairer access to affordable credit for consumers, the discussion focused on vulnerable consumers’ reliance on payday loans. With over 5.4 million payday loans borrowed over a year-long period in the UK in 2023, many in Wales are heavily reliant on them to cover anything from short-term to long-term living. Open banking can make the process safer and fairer, protecting consumers from rogue lenders.
Richard added:
“Our discussion on the Welsh fintech sector has taken place just as new data is released showing one in five, or 18%, of small businesses are now using open banking – OBL will keep working closely with industry and regulators to increase the wide range of benefits available to businesses across Wales, including SMEs which make up over 99% of total enterprises in Wales”.
The open banking ecosystem is worth more than £4 billion to the UK economy, attracting inward investment and creating almost 5,000 highly skilled digital jobs nationwide. Last year, the Welsh economy contributed heavily to this, accounting for 7% of the overall Gross Value Added – the measure of the value specific goods or services add to the economy.
OBL’s visit to South Wales is part of a series of regional visits to showcase the tangible benefits of open banking.
