The Innovation of Open Banking

The Open Banking Framework by Crown Commercial Service (CCS) is a brand-new opportunity for financial technology (fintech) companies.

Find out more about what it entails to see if your business could access the £800m in contracts available through the Framework with GovData’s expertise. 

What is Open Banking?

Open Banking is an alternative financial service to traditional bank systems. It is a system where financial data is securely shared between banks and third-party service providers using application programming interfaces (APIs), therefore replacing the reliance on card payments. 

Open Banking Limited publishes a report every 6 months analysing Open Banking trends in the UK and found that double the volume of payments were made using Open Banking Services in the first 6 months of 2023 compared to the first 6 months of 2022. This demonstrates the growth that these services are having as an alternative to traditional bank systems. Over 1 in 9 British consumers are active users of open banking, and 17% of small businesses. 

The benefits of Open Banking include: 

  •  • A reduction in customer transaction costs where card payments are the only method of payment. It is believed that the Open Banking Framework could achieve savings of 70-80%. 
  •  • Quicker vital financial payments for vulnerable members of society. 
  •  • It is now easier for SMEs to become Suppliers on the Framework. 
  •  • These services would help identify and reduce fraudulent activity by verifying the identity of account holders. 

HMRC’s Pioneering Approach

The UK is a global leader in Open Banking, shown by the creation of Open Banking Limited (OBL) in 2016. This is the delivery organisation working with the CMA9 and other stakeholders for the implementation of Open Banking services in the UK.

In March 2021, HM Revenue & Customs (HMRC) became the first mover in the UK Public Sector for Open Banking use. HMRC procured a fintech solution to enable the department to receive payments via Open Banking. HMRC has received more than 5.5 million tax payments – worth a total of around £13.5 billion – through Open Banking.

The Opportunity

The CCS Open Banking Framework is the first of its kind, where all Central Government Departments and UK Public Sector bodies can access these services. There will be an expected spend of £800m over 8 years, averaging £100m a year. 

The CEO of CCS, Simon Tse, said: 

We’re delighted to be launching the first comprehensive open banking agreement in the public sector, offering significant savings and vital innovations in financial capability. This solution is built on extensive market engagement with a range of providers, from major banks to fintech start-ups and government institutions. 

The flexible agreement reaffirms our commitment to providing maximum value to our customers, and opens up opportunities for a diverse spectrum of suppliers in an exciting emerging market.” 

The Open Banking Framework will provide 3 main service areas: 

• Digital Payments (including payments in, payments out and direct debits) 

• Account Information (including fraud, identity and income verification services) 

  • • Confirmation of Payee (CoP) (including providing a name and/or account checking) 

To help you find the services and suppliers to meet your needs you will be able to use the following filters: 

• Service Type

• Total Contract Value

• Hosting and Delivery Capabilities

How Can GovData Help? 

GovData are Public Sector experts who can break down the requirements of each Framework and support you in your submission. 

For example, a Cyber Essentials Basic Certificate is required as a minimum to join the Open Banking Framework. Suppliers must also be in the Open Banking Directory and be approved by the Financial Conduct Authority (FCA). Should there be a requirement or accreditation you do not currently hold or are unsure about, GovData can advise and provide the necessary resources for you to obtain this. 

Find out more details about the Open Banking Framework via our dedicated webpage, or you can browse all our IT Pillar Frameworks, such as All Wales Products and Services Agreement III and ICT Hardware and Peripherals Equipment. We also have several Frameworks operating in the Professional Services Pillar. 

Suppliers can join at any time over the 8-year duration, so make sure you don’t miss out on the £800m set aside for this Framework. Contact GovData on 01925 257900 or email [email protected] today! 

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