Open Banking and the Promise of Inclusion

I had been a financial journalist for over a decade by the time I came up with the idea for my book. It had often struck me how so many of the financial products and services I was writing about were aimed at already wealthy or financially savvy individuals. Obviously, it is important that people of all backgrounds have access to products and services that encourage them to save and invest, or to grow their financial confidence.

As I had become more familiar with open banking and the use cases it was generating, I saw that it had the potential to address an untapped part of the market, that is, individuals who are largely excluded or underserved by the financial system. I feel strongly that everyone has a right to access financial services but that there was no real incentive for certain parts of the industry to serve those individuals. Open banking appeared to be changing that, so I wanted to explore it more and felt that a book would enable me to do this in far more depth and scope.

Yes, we are seeing plenty of examples of open banking-enabled innovation from fintechs that are offering products and services to individuals who have not typically been served by mainstream financial services. There are fintechs addressing issues such as being able to port your credit history with you to another country, so that individuals starting a life in a new country have evidence of their previous financial commitments and ability to pay. There are also lenders using open banking data to lend or offer credit to individuals considered ‘thin file’, such as students, immigrants and those who are newly banked.

Typically, in emerging markets or countries that have a significant un- or underbanked population, open banking and open finance has had a more obvious and far-reaching impact than in, say, developed countries. Brazil is probably the best example and is a country I look at closely in my book. At that point, it was only three years into its open banking and open finance journey. Brazil is now considered a leader in open finance. A recent article by Ozone API reported that there are more than 700 registered participants spanning all financial services, over 60 million customers actively sharing data, while Pix, its central bank’s payments platform, processes in excess of six billion monthly transactions.

By contrast, in the UK, the impact of open banking is more obviously felt among those who are underbanked and who need to build their financial resilience. By that I mean that open banking-enabled financial services in developed markets have tended to address the need to improve overall financial health, particularly in the past few years as the cost of living has soared. The statistics, however, are still impressive, with some important milestones having been reached recently. According to Open Banking Limited, more than one billion open banking payments and 100 billion API calls have been recorded across the CMA9 banks since the launch of open banking more than eight years ago.

One of the most surprising things among those I spoke to who had lived financial exclusion was how quick the financial system was to shut people out entirely and how little flexibility or nuance the industry allowed for. Some of those experiences had happened many years ago, while others I spoke to had experienced financial exclusion more recently. Some of those individuals had gone on to work in the industry that had previously excluded them and to make sure no-one had to go through what they did, which is admirable. Perhaps it was not surprising but it was certainly inspiring to speak to people working in financial services and open banking whose empathy, passion and lived experience give them a unique perspective on the products and services that have the most positive impact.

Aside from Brazil, which is well documented, the United Arab Emirates (UAE) has been making huge strides when it comes to financial inclusion. The Central Bank of the UAE (CBUAE) has stipulated that “every natural Person shall have the right to access all or part of the banking and financial services”. The UAE’s National Financial Inclusion Strategy 2026 to 2030 has been developed in partnership with the CBUAE, the Organisation for Economic Co-operation and Development and the Arab Monetary Fund. Financial literacy and economic empowerment are a human right, so by placing financial inclusion front and centre, the UAE is clearly demonstrating that it recognises this.

At the same time, open finance in the UAE has been moving at pace and we’re seeing some exciting developments from fintechs and financial institutions in the region, particularly around account-to-account payments.

I think where open banking has been most effective at tackling financial exclusion is in those jurisdictions that have either built in financial inclusion use cases as a key outcome from the start, and where a hybrid approach has been taken, combining regulation with market forces. Countries that consider financial inclusion a key pillar of economic growth and recognise it as an opportunity to grow financial confidence will generate the most inclusive use cases.

I would also like to see countries measuring not only API calls and open banking payments, but also establishing a measurement of financial inclusion as a result of open banking and open finance initiatives.