UK and Nordics ‘leading the way’ on Open Banking

The UK and Nordic countries are the best placed to take advantage of the Open Banking ecosystem, according to a Mastercard report, which highlighted their high number of Open Banking APIs, consumer readiness and progressive regulation.

The new report, Open Banking Readiness Index: The Future of Open Banking in Europe, has revealed the progress of Open Banking across 10 European countries.

It found that the digital infrastructure in both the Nordics and the UK put those countries ahead of their European counterparts.

According to the Mastercard report, 95% of households in Denmark have internet access, rising to 98% in Norway, 96% of Swedish households and 96% in the UK.

Norway has the highest percentage of phones which are smartphones at 95%, compared to 88% in Denmark, 79% in Sweden and 83% of UK phones.

The report also highlighted the proportion of 14 to 76-year-olds using digital banking among the Nordic countries and the UK, and found that this was 88% in the UK, 84% in Sweden, 91% in Denmark, while Norway had the highest at 95%.

As part of its research into how prepared European countries are to embrace the Open Banking ecosystem, Mastercard took into account data from the UK’s Open Banking Implementation Entity (OBIE), which showed that around 294 fintech companies and payment service providers have joined the Open Banking ecosystem in the UK, of which 102 have live offerings in the market.

Mastercard said that the pan-Nordic collaborative models and P27 initiative have aided the region’s Open Banking readiness, with most of the large Nordic banks having an Open Banking strategy, the frontrunners being Nordea Group and DNB Bank.

Jim Wadsworth, senior vice president for Open Banking at Mastercard, said: “By taking advantage of pan-European developments such as PSD2, all European banks are progressing towards a full Open Banking environment, but it is clear the UK and Nordics are leading the way with high consumer readiness and a number of solutions already live.

“There are varying approaches across the continent and to ensure that all European markets can take advantage of the opportunities that Open Banking presents, we need greater standardisation.”

Elsewhere in Europe, the report identified that in France, Italy and Spain Open Banking is being used as a vehicle for digital transformation in domestic payment ecosystems, while in Germany a collaborative approach specific to that country is being taken for the development of Open Banking.

In Poland and Hungary, Open Banking is being used as a vehicle for “leapfrogging away from” legacy banking infrastructures.