Trends in Open Banking 2025: Guide for Businesses

Open banking is no longer just a trend — it’s reshaping how businesses and consumers interact with financial services. What started as a regulatory push in Europe has now grown into a global movement, bringing better payments and data insights.

As adoption rises and new technologies like AI gain momentum, 2025 will likely bring new changes to the ecosystem. In this article, we explore the key trends shaping the future of open banking and what they mean for merchants.

What Is Open Banking?

Open banking is a financial framework that allows traditional banks to securely share data with licensed third-party providers via application programming interfaces (APIs) with customer consent. In Europe, open banking started with the enforcement of PSD2 in 2018, which required banks to share APIs with authorised companies.

Open banking ended banks’ monopoly over customer data. With access to data, licensed providers can create new, innovative products and services such as payments, personalised data insights, aggregated account management, and more. Since its introduction, open banking has gained traction worldwide, transforming the world of fintech.

Key Open Banking Trends in 2025

Let’s have a look at the key open banking trends that are set to shape the industry in the upcoming year.

Growing Adoption

Open banking continues to become more popular in Europe and globally. In the UK, for example, 13% of digitally active consumers and 18% of small businesses were using open banking services, according to the Open Banking Impact Report published in March 2024. This marks a jump from mid-2023, when overall penetration stood at 1 in 9 users.

The UK leads Europe in the sizes of their open banking markets. In key countries like France, Germany, Spain, and Italy, only 2% of digital consumers used open banking in 2022, compared to the UK’s 9.2%.

Small businesses remain at the forefront, with nearly 1 in 5 relying on open banking to simplify payments and manage finances. Consumer adoption, now at 1 in 7, is catching up as more and more discover the benefits of faster payments and improved financial tools.

For businesses, the rising adoption means greater opportunities to innovate. It’s also a chance to stay ahead in markets where open banking is quickly becoming a standard expectation.

Payments versus Data

Open banking payments – the so-called pay-by-bank – are driving the growth of open banking adoption, according to the report, including variable recurring payments (VRPs) and single immediate account-to-account transactions.

In August 2023, open banking payments surpassed open banking data tools for the first time, according to the report. Payment penetration stood at 8.2%, while data penetration reached a new high of 7.2% in January 2024, following steady growth. This growth in data services may have been influenced by the rollout of open banking connections to Apple Wallet.

Small businesses remain more likely to use data services, while consumers are balancing payments and data in the UK. Among active consumers, 56% use payment services, compared to 25% of active small businesses. Despite payments leading the adoption, data services are also regaining momentum, highlighting a broadening appeal of open banking.

Artificial Intelligence

Artificial intelligence (AI) is expected to play a key role in the future of open banking. According to McKinsey, AI could add between $2.6 trillion and $4.4 trillion annually to the global economy across various industries.

In open banking, AI can improve fraud detection for payments and provide more accurate financial analytics. AI-driven tools can analyse transaction data to offer personalised product recommendations and support affordability checks. These insights are based on real user spending patterns, helping businesses tailor their services more effectively.

For businesses, this means that they can leverage AI tools within the open banking suite of their payments provider.

Variable Recurring Payments (VRP)

Variable recurring payments (VRPs) are the latest promising open banking opportunity. They allow customers to make payments of varying amounts at regular intervals, delivering a smoother and more flexible user experience.

Built on open banking infrastructure, VRPs let customers authorised providers to process multiple payments directly from their bank account. Each transaction is secured with strong customer authentication (SCA).

There are two main types of VRPs: sweeping and non-sweeping. Sweeping involves transferring money between a customer’s own accounts, such as automating monthly investments or avoiding overdraft fees. These are already available in the UK. Non-sweeping VRPs, on the other hand, manage payments between a customer and a merchant.

Although not currently mandated in the UK, non-sweeping VRPs are growing in popularity. In 2022, UK bank NatWest partnered with open banking providers to launch non-sweeping VRPs as a payment option.

New Regulation: PSD3

New wave of payment regulations in Europe, expected at the end of 2024, is set to shape the future of open banking. In June 2023, the European Commission released a draft of PSD3, an updated version of PSD2. The final regulation is expected by late 2024, along with an enforcement timeline – it’s worthwhile for businesses to stay up to date with open banking news.

PSD3 aims to improve security through stronger requirements for SCA. It also focuses on better API functionality, ensuring smoother integration and more homogenous adoption across EU states, which remains the key open banking challenge in Europe. These updates are poised to drive further innovation in the open banking ecosystem.

New Industries

Open banking is expanding to new industries, and this trend is set to continue. The open banking technology is already used by finance, insurance, tech, e-commerce, real estate sectors, and this trend is now broadening to climate tech.

For example, companies like Doconomy use open banking data to measure and manage carbon footprints. And this is only the beginning, as an increasing number of businesses continue to explore and develop new use cases for open banking.

Open Banking with Noda

With Noda’s Open Banking API, you can offer direct bank payments with better user experience, lower fees and no chargebacks. That means a smoother, more secure payment flow for your customers and more savings for your business.

Our payment plugins for popular e-commerce platforms like OpenCart, WooCommerce, Magento, and PrestaShop, or no-code payments, allow you to easily set up open banking payments. Whether you’re starting out or scaling, we’ve got flexible plans to fit your needs.

Reach More Customers

We offer instant bank payments with flexible fees and a great acceptance rate, partnering with over 2,000 banks in 28 countries, including the EU and more, supporting many currencies.

Noda lets you leverage pay-by-bank technology internationally, saving money on avoiding middlemen fees and chargebacks and offering your customers the convenience of paying through their trusted local banks.

Grow Your Business

From helping with customer verification to improving the user experience and providing customer insights, Noda’s tools are designed to grow your business. We help you make payments easier and forecast long-term value.