—TechRound does not recommend or endorse any financial, investment, gambling, trading or other advice, practices, companies or operators. All articles are purely informational—
For decades, the global financial system relied on infrastructure that was built for a simpler, slower era. The concept of “banking hours” dictated the speed of commerce, with transactions often pausing for weekends, holidays, and arbitrary cut-off times.
Today, data travels instantly across fibre-optic cables, but the movement of money remains frustratingly sluggish, tethered to batch processing systems designed in the 1970s. This disconnect between the speed of information and the speed of value transfer has been a significant friction point for businesses and consumers alike.
Rewiring Payment Systems
The rise of Open Banking APIs marks a structural change, not just a cosmetic upgrade. Instead of routing payments through layered intermediaries and delayed settlement cycles, real-time account-to-account transfers allow funds to move directly and securely between banks. This replaces rigid legacy rails with flexible connectivity designed for a 24/7 economy.
User behaviour is driving the change. Whether someone is cashing out through casinos that pay out well, transferring earnings from a gig-economy app, or moving money via Revolut, expectations now centre on instant access and transparent balances.
For instance, it’s no longer just about generous returns, but about how quickly winnings reach a bank account or e-wallet. Players increasingly judge platforms by withdrawal speed, payment flexibility and processing transparency, not simply by promotional offers. Even services like PayPal have reinforced the idea that transfers should happen in near real time. In a digital economy that operates around the clock, a three-day settlement window feels less like standard procedure and more like unnecessary delay.
Even retail banks are feeling pressure from services like PayPal, which have normalised near-immediate transfers. In a digital environment that never sleeps, waiting three business days increasingly feels like a relic of another century.
Understanding The Bottlenecks In Traditional Bank Transfers
To appreciate the velocity of fintech, one must first understand the legacy systems it replaces. Traditional payment rails, such as BACS (Bankers’ Automated Clearing System) in the UK, operate on a three-day cycle known as the “three-day clearing cycle.” When a payment is initiated, it enters a submission queue, is processed the following day, and finally settles on the third.
This system relies on batch processing, where transactions are grouped and sent in massive files at specific times of the day. If a business misses a submission window by minutes, the payment is delayed by a full 24 hours.
The architecture of these legacy systems is inherently linear and dependent on multiple intermediaries. A single transaction might pass through an originating bank, a central clearing house, and a receiving bank, with each node in the chain performing its own reconciliation and fraud checks.
This sequential processing creates multiple points of potential failure and delay. These systems were often built on mainframe computers using codebases that are now difficult to maintain or update. This essentially makes them resistant to the kind of agile changes required by the digital market.
The obstacles are most obvious during non-working hours. Legacy rails often respect the traditional work week, meaning a transfer initiated on a Friday evening might not clear until the following Wednesday. For a startup trying to manage cash flow or a consumer needing emergency funds, this latency is more than an inconvenience; it is an operational risk. The inability to move money on weekends or bank holidays creates a “liquidity gap” that stifles economic activity and forces businesses to hold larger cash buffers than would otherwise be necessary.
How Open Banking APIs Accelerate Data And Money Flow
Open Banking APIs solve the latency problem by establishing a direct, secure pipeline between financial institutions and third-party providers (TPPs). Unlike screen scraping or batch files, APIs allow for real-time communication.
When a request is made, the bank’s server talks directly to the fintech application’s server, authenticating the user and authorising the movement of funds in milliseconds. This architecture bypasses the manual reconciliation steps of the past, leveraging the Faster Payments Service (FPS) to settle funds almost instantly, 24 hours a day, 365 days a year.
The performance metrics of this new infrastructure are staggering compared to the old rails. Recent performance data highlights the efficiency of these systems; for example, Bank of Ireland UK achieved 48ms response times for transactions via open banking APIs by the end of last year.
This speed is critical for automated finance, where algorithms might need to move money between accounts to optimise interest yield or cover outgoing expenses without human intervention. The reduction in latency from days to milliseconds enables entirely new business models that rely on micro-transactions and just-in-time liquidity.
Adoption rates confirm that the market is rapidly shifting towards this API-first model. The volume of traffic flowing through these secure channels has exploded as businesses integrate the technology into their back-end systems. Statistics show that the UK open banking ecosystem recorded 24.0 billion successful API calls in 2025, marking a massive increase in usage. This surge indicates that APIs are no longer an experimental alternative but the new standard for financial data and payment transmission in the UK.
Consumer Demand For Instant Gratification Across Digital Sectors
The psychological change in consumer behaviour is perhaps the strongest tailwind for Open Banking adoption. In an age where groceries can be delivered in ten minutes and media is streamed instantly, the financial sector is being forced to catch up. The “Uberisation” of expectations means that users view any delay as a system failure.
If a gig worker completes a shift, they expect their wages to be available immediately, not at the end of the month. This demand for “earned wage access” is driving payroll companies to abandon BACS in favour of API-driven instant payouts.
This expectation extends to the e-commerce checkout experience, where friction leads to cart abandonment. Open Banking facilitates Single Immediate Payments (SIPs), allowing customers to pay directly from their bank app without entering card details. This not only speeds up the transaction for the user but also provides the merchant with instant funds, improving their working capital position. The elimination of the “pending” status on bank statements gives consumers better visibility over their actual financial position, reducing the risk of accidental overdrafts caused by lagged transaction reporting.
The growth of the subscription economy has created a need for smarter, more flexible recurring payments. Variable Recurring Payments (VRPs), enabled by Open Banking, allow consumers to authorise limits rather than fixed amounts, giving them greater control over their outgoings.
Instead of the rigid Direct Debit mandate, which can be difficult to cancel or amend, VRPs offer a transparent, user-managed way to handle bills and subscriptions. This level of control and speed is rapidly becoming a baseline requirement for any consumer-facing fintech app, forcing legacy banks to upgrade their own interfaces to compete.
—TechRound does not recommend or endorse any financial, investment, gambling, trading or other advice, practices, companies or operators. All articles are purely informational—
