When open banking is discussed, attention tends to focus on visible outcomes.
Pay by Bank adoption. Faster payments. New recurring payment models. Improvements in customer experience.
These developments are important, but they are not the reason open banking has progressed way beyond a proof of concept.
The more significant achievement is the creation of a shared framework covering technical standards, customer experience, security, operational processes and governance. That framework provides a common reference point for banks, third parties, platforms and merchants.
The value of that work is often overlooked because it sits beneath the surface.
The hidden infrastructure of innovation
Innovation is frequently associated with new features. In practice, large-scale innovation often depends on reducing uncertainty.
When participants share a common set of technical and operational expectations, product teams spend less time interpreting behaviour, engineering teams spend less time accommodating exceptions and operational teams spend less time investigating inconsistencies.
The result is an environment where innovation becomes easier to deliver and easier to scale.
This principle extends far beyond payments. The internet itself grew through shared protocols and standards. Mobile telecommunications, container shipping and payment card networks all benefited from agreed approaches that allowed participants to build on common foundations.
Open banking follows the same pattern.
Standards create confidence
Enterprise adoption depends on confidence.
A platform integrating with hundreds of thousands or millions of users needs to know that journeys will behave predictably, that operational processes are understood and that exceptions can be managed consistently.
Standards contribute directly to that confidence by establishing expectations around:
- authentication and consent flows;
- API structures and data formats;
- customer experience requirements, and;
- operational responsibilities.
These expectations reduce ambiguity and make it easier to build systems that perform reliably at scale.
Open banking did not create these inconsistencies
One of the more surprising discoveries for organisations building on open banking is how much variation exists beneath the surface.
Differences can appear between banks. They can also appear between brands within the same banking group, and even between different account types operated by the same institution.
A recent example involved account names containing brackets. Consumer accounts accepted the character while business accounts rejected it. Another involved account-name length limits, with one account type supporting substantially longer names than another despite both being offered by the same provider.
These differences can seem difficult to justify in an era of digital banking. An API can comfortably transport hundreds of characters. Modern applications are not constrained by the physical limitations that once influenced cheque printing, statement layouts or fixed-width database fields.
The explanation is usually found elsewhere.
Most large banks operate multiple technology estates that have evolved over decades. Current accounts, business accounts, savings products and acquired brands may all originate from different core platforms. Open banking APIs are often layered on top of those existing systems rather than replacing them.
As a result, the API frequently exposes constraints that originated long before open banking existed.
Kieron James, CEO of Wonderful and Founder of Asima, puts it this way:
“Open banking has not created these inconsistencies. It has exposed them. The standards give us a reference point for what good looks like. The frustration comes when the ecosystem accepts avoidable differences that make platforms harder to build and operate.”
The challenge is implementation
The existence of standards does not automatically produce consistency.
Many organisations building on open banking have experienced variations in implementation across institutions. Optional fields may be treated differently. Customer journeys can diverge from published guidance. Performance characteristics vary. Some capabilities appear consistently across the ecosystem while others remain uneven. The account-name examples illustrate the issue well.
There is no obvious open banking principle that says brackets should be accepted for one account type and rejected for another. Equally, there is little technical justification for significant differences in supported account-name length between products offered by the same institution.
From a bank's perspective, these behaviours may be inherited from legacy systems.
From a platform's perspective, they become additional edge cases that need to be discovered, handled, tested and supported.
A standard only creates value when participants can depend on it.
Why consistency matters more than ever
As open banking matures, consistency becomes increasingly important. The first generation of implementations focused on proving capability. The next phase depends on operational predictability.
Product teams need confidence that journeys will behave consistently.
Operations teams need confidence that issues can be diagnosed efficiently.
Compliance teams need confidence that controls operate as expected.
Merchants and platforms need confidence that customer experiences remain stable over time.
Each of these outcomes depends on participants implementing standards in a sufficiently consistent way.
The implications for AI and automation
The growth of AI introduces an additional dimension to the discussion.
Large language models, automation platforms and orchestration systems perform best when terminology, processes and behaviours are predictable.
A fragmented ecosystem requires additional interpretation, exception handling and reconciliation. A standardised ecosystem provides clearer signals and more reliable outcomes.
This is one reason standards may become more important rather than less important over the coming years.
As more operational processes become partially automated, consistency becomes a practical requirement rather than simply a governance objective.
The next phase of open banking
The UK has already achieved something significant.
There is a shared framework for how open banking should operate. The standards, governance structures and implementation guidance provide a foundation that many markets continue to develop.
The next challenge is ensuring that participants behave consistently enough for enterprises to rely on that framework with confidence.
That requires continued attention to implementation quality, operational discipline and accountability across the ecosystem.
Structured progression
The most valuable infrastructure is often the least visible.
Open banking's long-term success will not be determined solely by adoption figures or transaction volumes. Those metrics are important, but they are outcomes rather than foundations.
The foundations are the standards, governance processes and operational expectations that allow participants to work together effectively.
When those foundations are implemented consistently, innovation becomes easier, integration becomes simpler and trust becomes easier to earn.
That may prove to be one of open banking's most important advantages over the coming decade.
¹ Open Banking Limited, Open Banking Standards. Link
² Open Banking Limited, Customer Experience Guidelines. Link
³ HM Treasury, National Payments Vision. Link
⁴ Financial Conduct Authority, Payments regulatory priorities. Link
