Open finance vs open banking: are they the same thing?

Open finance vs open banking

Open banking is the sharing of consumer data between banks and regulated third parties with the consent of the consumer. Open banking is primarily focused on payments and data. Payments via open banking technology are safer, faster and less costly than legacy alternatives, and data services enable consumers to make better informed financial choices, like credit checks and loan assessments.‍

(Open Banking, 2022)

Is open finance the same as open banking?

Though they may sound similar, open finance and open banking aren’t the same. Open finance is an extension of open banking, where a variety of traditional and new financial services are enabled by the consensual sharing of consumer data by banks. According to UK Finance (2022), open banking has set the foundation for open finance to scale and flourish.‍

How is open finance beneficial to the UK market?

Just like open banking, it is envisioned that open finance will give retailers and businesses the opportunity to personalise and tailor their services more effectively, and thus increase competition in the long run. Having access to their customers’ data will help them drive value-focused solutions and build stronger brand loyalty with the consumers, positioning their individual wants and needs at the centre. Simultaneously, it will help businesses reduce costs while creating efficient solutions.‍

  • Smart Data Working Group: a group aiming “to support the development of systems and standards that facilitate smart data innovations” (GOV.UK),
  • Corporate Finance Institute (CFI): an educational platform for finance professionals,
  • The Department of Business, Energy and Industrial Strategy (BEIS): a UK ministerial body responsible for business, energy, science and innovation, climate change and industrial energy,
  • Financial Conduct Authority (FCA): the financial services and markets regulator in the UK.‍
(Deloitte, 2022)

‍A little bit about Citizen

Citizen (a ‘TPP’) was one of the first fintech providers to offer open banking-based services in the UK. Our service enables instant cardless payments — allowing businesses of any size or type to receive and send funds that reconcile immediately, with far lower fees than debit or credit cards, and a user experience that simply delights.‍



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Citizen enables instant, cardless, account-to-account payments via their payment solution platform, PayBlox.