Our Head of Strategic Policy, John Mowat, recently discussed the development of open banking and open finance at the Payments Regulation and Innovation Summit 2025.
Joining fellow industry leaders Janine Hirt, CEO at Innovate Finance, and Charlotte Crosswell, Chair and Trustee of Open Banking Limited and Chair of the Centre for Finance, Innovation and Technology (CFIT), John and the panel discussed how the two key developments are promoting competition, innovation and financial inclusion in the wider payments ecosystem.
Hosted by City & Financial Global, this year’s one-day conference brought together payments regulators, financial institutions, challenger payments providers, and infrastructure providers to explore new and emerging technological and regulatory developments in the payments landscape. Key themes included outcomes of the National Payments Vision (NPV), open banking, and the new authorised push payment (APP) regulations.
During the panel session, ‘Open banking and open finance: Promoting competition and financial inclusion’, the panel of industry-wide representatives debated:
- Whether open banking has met its objective of increasing competition in payments
- How payments systems are enabling open banking payments to promote financial inclusion
- The next steps for open banking and open finance.
The UK and open banking
Following the Competition and Market Authority’s (CMA) regulatory mandate in 2017, the UK has pioneered open banking, and the CMA’s final roadmap for open banking was completed in 2024. From its inception, the objective of open banking was to promote competition and financial inclusion in the payments ecosystem. Since then, it has successfully offered end users more payments choices, enabling them to make better informed payment decisions, and has improved access to financial services.
Now that the original intention of the CMA’s roadmap has been achieved, the panel agreed that it is important to be clear on open banking’s vision going forward, and how it will be delivered. The current ambition of UK authorities is to create an alternative payment method to cards, however there are important foundational enablers that must be in place to get to the next level of innovation in this space.
Pay.UK and open banking
As part of the conversation, John talked about how Pay.UK, as a universal connector to nearly every UK bank account, can help to enable open banking payments to promote financial inclusion. John explained that together, the Bacs Payment System (Bacs) and Faster Payment System (FPS) provide a central service through which almost all open banking transactions are processed. Upgrading this central infrastructure presents significant opportunities to enhance open banking led end-user journeys, but also requires industry agreement and investment to implement. Pay.UK will continue to collaborate with the industry in 2025 to explore this.
John went on to highlight Pay.UK’s continued work into our key priority of fraud detection and prevention. The results of a pilot of a new fraud overlay service, carried out by Pay.UK last year, revealed an average 40% uplift in fraud detection. This showed that a whole-of-market approach to sharing of data is significantly more effective in the fight against fraud, than the use of individual data sets. The key challenge in making this a reality, as with open finance, is gaining the agreement of many parties to share payments data. The panel agreed that the UK Government will play an important role in achieving this.
The panellists concluded that the next step for the continued development and growth of open banking and open finance is greater collaboration between the payments industry, regulators and UK Government, with a view to establishing a multilateral agreement (MLA) and commercial/regulatory model.
John said: “I was delighted to be asked to join the panel at the Payments Regulation and Innovation Summit. The session presented an excellent opportunity to explore key topics in the open banking and open finance space, and emphasised the importance of collaboration between the industry, regulators and the Government to ensure the continued growth of open banking.”
