Khadra explores the key players in the Open Banking space and the impact they may have on consumers’ financial behaviours.
Providing customers with greater financial control forms the core mission of open banking. Users can choose to share their financial data with third-party platforms (APIs) to get personalised insights on their spending, budgeting, risk-taking feasibility, etc.
1. True Layer
A London startup established in 2016, True Layer provides a cohesive service even enabling merchants who are not yet regulated to access open banking through their product agent model. True Layer allows software developers to build financial apps through Payments API (Application Programming Interface) and Data Application PI, which provides a way for apps such as crypto wallets, budgeting apps such as moneybox and Yolt to connect to banks and other financial institutions. With their support, open banking platforms can initiate and make fast payments.
More than half of the open banking traffic in the UK, Ireland and Spain goes through True Layer, making it a key player in the Open Banking Space. Currently, True Layer has passed its series D funding round and disclosed $142 million in total investment. and is keen to scale up productions of new products such as TrueLayer’s own payment method.
2. Tink
Stockholm-based Tink, a cloud based platform providing infrastructure to power the future of financial services. As Europe’s largest open banking company Tink provides a combined aggregation (AIS) and payment initiation (PIS) with personal finance management (PFM) products for banks, financial service providers and developers across Europe. Tink enables customers to use smart financial services such as risk insights, account verification and personal finance management tools through a single API.
It has connections with over 3400 European banks and institutions across 14 European markets. Recently, Tink was acquired by global payments leader Visa for €1.8bn, a landmark acquisition for European tech and open banking.
3. Yapily
UK-based Open Banking infrastructure provider, Yapily enables companies to access financial information across banking, lending, accounting through an open API.
In the pandemic, Yapily experienced an exponential customer growth due to extensive adoption of online shopping. Yappily’s customers include American Express, IBM and GoCardless enabling companies to access their customers’ account information seamlessly. Yapily raised $51 million in its Series B funding round led by Sapphire Ventures. Its platform provides 80% account coverage across 15 European Countries.
Yappily continues to expand and has now settled in Lithuania in search of a new European Hub where there is a supportive regulator and fintech ecosystem.
4. Yolt Technology Services
Launched in 2019, Yolt Technology Services is Europe’s leading open banking provider of Payment Initiation Services ( PIS) and Account Information Services (AIS) to financial institutions and tech businesses across the UK and Europe. Yolt stands out in particular for their Cash Flow Analyser which provided credit underwriters deeper insights into the cash flow of credit applicants which in a time of increased lending presents a key tool.
Yolt was recently granted a PSD2 by the FCA, which enables Yolt to continue with payments services under its own license.
Yolt Technology services offers 3 services: account information, payment initiation and data enrichment service, and averages 14 million Application Programming Interface calls each week.
The Verdict
These companies stand out due to their rapid rise across the industry and the products which have enabled customers to experience greater financial control while creating a greater user experience. This could catalyse more traditional banks to be more open to challenger banks and to incorporate open banking to improve customer retention. However, there are key challenges including slow adoption of open banking as active users of open banking only reached 3 million in 2021 miles behind previous predictions of 33 million by 2022.
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