Open banking has long been pedalled as the future of fintech, but which companies are the leading providers of the service in the UK?
Image source: Daniel Kjellén and Fredrik Hedberg/Tink
Update 12-06-2020 – This article was updated to include Yapily.
Open banking has become one of the most popular adaptations for both fintechs and big finance alike.
Open banking was first introduced as a concept when the EU decided the banking industry needed greater competition and wanted to expand the opportunities offered to fintechs.
Since the introduction of the EU’s Second Payment Services Directive (PSD2) in January 2018, open banking has revolutionised the way millions of people manage their finances and use their data.
Following the introduction of PSD2, the Competition and Markets Authority (CMA) ordered the biggest banks in the UK to share their APIs with other banks and third-party providers which helped the fintechs on this list to thrive.
The ability to access all your accounts and integrate non-banking financial services too has proved increasingly popular over the last few years, with the likes of fintech giants Monzo, Revolut and Starling all offering some form of the technology.
Open banking’s main goal is to increase the transparency of the banking industry, so without further ado, and full transparency, here are the UK’s leading open banking providers.
Bud
Who started it?
Bud was founded in 2015 by Ed Maslaveckas and George Dunning, initially beginning its life as a financial wellbeing platform.
The platform recently appointed hedgefund heavyweight, Lord Stanley Fink, the former CEO of the hedge fund firm the Man Group, as the Chair of its board of directors.
How is it funded?
Bud counts Goldman Sachs, 9 Yards Capital, HSBC and Investec as investors and also won a slice of the UK government’s £2m rental recognition prize back in 2018.
In February 2019, the fintech bagged $20m from HSBC and Goldman Sachs to help it double in size and expand into new markets.
Who are the customers?
One of Bud’s primary customers is HSBC, who also happens to have invested a significant amount in the fintech.
In December 2019, Bud extended its partnership with HSBC and signed a three-year global deal with the bank to give access to Bud’s open banking, API and data.
Last October, Bud shifted away from larger firms to focus more on transactional data for smaller firms and introduced a developer portal for SMEs to access Bud’s sandbox environment.
Plaid
Who started it?
Plaid was founded in 2012 by Zach Perret, who recently spoke at the AltFi Digital Summit 2020, and William Hockey, who has since left his role as chief technology officer and now sits on Plaid’s board of directors.
The San Francisco-based startup recently celebrated its first anniversary of being in Europe following its surprise launch of financial management app Emma.
How is it funded?
In January 2020, it was revealed that Visa would shell out $5.3bn for the Silicon Valley startup, although the deal is yet to be completed.
Prior to the sale, Plaid had previously received several strategic investments from Visa and Mastercard.
Who are the customers?
Plaid connects to over 15,000 financial institutions across the US, Canada and Europe and 80 per cent of the biggest fintechs rely upon Plaid’s API infrastructure to operate.
The open banking powerhouse has helped the likes of financial management app Emma, Venmo, trading platform Robinhood, Monzo and TransferWise.
Tink
Who started it?
Tink was founded in Stockholm, Sweden in 2012 by Daniel Kjellén and Fredrik Hedberg and is now offered in 17 markets across Europe and Latin America.
How is it funded?
In January 2020, it was revealed that Tink had just closed its largest funding round to date, totalling €90m.
The Swedish fintech has raised over €200m to date and has secured several strategic investments from PayPal, including most recently when PayPal injected an undisclosed amount to help the fintech conquer Europe.
Who are the customers?
Tink recently revealed a strategic investment from payment giant PayPal that would see it’s technology available to some customers across all countries in the European Economic Area (EEA)
Tink integrates with more than 2,500 financial institutions, reaches over 250m customers and processes more than 10bn transactions a year.
TrueLayer
Who started it?
TrueLayer was founded in 2016 by serial entrepreneurs, Francesco Simoneschi and Luca Martinetti.
Of late, the fintech has been largely focussed on integrating with fintechs having joined forces with alternative lender Capital on Tap and SME banking service ANNA Money and has also recently launched an open banking tool for charities.
How is it funded?
To date, the financial API provider has received just shy of $47m from multiple investment rounds, including a $35m round from Tencent and Temasek last July.
It counts top VC firms, Northzone, Anthemis Group and Connect Ventures as existing investors.
Who are the customers?
TrueLayer’s API technology has been integrated by the likes of peer-to-peer lender Zopa, renting fintech Canopy, AI assistant Plum and digital bank Monzo as well as most of Europe’s major banks.
The fintech also recently scored a contract with the UK government to help roll out its Payment Initiation Service (PIS) across the Crown Commercial Service, part of the UK’s Cabinet Office.
Yapily
Who started it?
Yapily was founded by former Goldman Sachs investment banker, Stefano Vaccino in 2017.
Vaccino was fascinated by the social impact of open banking and the ability it holds to bring financial wellbeing and knowledge to the masses.
How is it funded?
To date, Yapily has raised $18.4m, including a $13m Series A round primarily led by investment firm Lakestar, which has invested in the likes of Spotify, Skype and Revolut.
The firm also completed a $5.4m seed round in May 2019 which was led by HV Holtzbrinck Ventures, which has invested in fellow fintechs SumUp and Penta, and LocalGlobe, an investor in the likes of Tide, Cleo, Robinhood and Transferwise.
Who are the customers?
Yapily counts Intuit QuickBooks and GoCardless as customers, as well as several other fintechs and firms and has recently been selected as an open banking provider for IBM.
The fintech currently has 80 per cent account coverage across Europe and 99 per cent coverage here in the UK, with the hopes to expand even further across Europe in the coming months.
Yolt Technology Services
Who started it?
Yolt Technology Services (YTS) was officially launched in September 2019 by the current chief business officer, Leon Muis and is headquartered in Amsterdam.
YTS is the open banking arm of financial management app Yolt, which first launched in beta in June 2017.
In January 2018, following the introduction of PSD2, YTS, under the umbrella of Yolt, was the first third-party provider to successfully make an open banking API call and since then has made over 650m of them—or 50 per cent of all traffic.
How is it funded?
Both Yolt and YTS are ventures of ING, meaning that Yolt Technology Services’ is entirely supported through funding provided by the Dutch bank and as a result the amount it has invested is unknown.
Who are the customers?
Yolt Technology Services recently reached 80 per cent coverage of bank accounts in Italy, France and Spain following the addition of new APIs to its service and already hit 95 per cent API coverage in the UK and 90 per cent in the Netherlands.
YTS is available across Europe and makes, on average, 18m API calls each week and has made over 650m since its inception.
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Source : From the Web