Is Open Banking Still The Best Foundation For UK FinTech Startups?

Open Banking has been a transformative force in UK financial services over the past decade. By standardising access to financial data and lowering barriers to entry, it created fertile ground for a wave of fintech startups to innovate in payments, lending and personal finance. There’s no doubt that it contributed a great deal to the financial services landscape.

But now, APIs are widely available and access to bank data is considered standard, so some people have started asking,  is Open Banking still the best foundation for UK fintech startups, or has it simply become the starting line?

According to leading industry voices, the answer is nuanced. Open Banking is far from obsolete, but its role has matured.

A Shift from Disruptor to Infrastructure

Adam Cox, Co-Founder and Director at Open Banking Expo, points out that Open Banking’s early impact was profound. According to Cox, “Open Banking is not just still relevant for UK fintech startups, it remains one of the strongest foundations for innovation we have. But its role has matured. What began as a catalyst for disruption is now evolving into the core infrastructure powering the next generation of financial services. In its early phase, Open Banking fundamentally changed the rules of the game. It lowered barriers to entry, enabled secure access to bank data and gave startups the ability to build products that previously required full banking licences. That shift unlocked a wave of innovation across payments, lending and personal financial management.”

Cox adds that while many initial use cases have now been explored, Open Banking has achieved exactly what it was designed to do: create a more open and competitive financial ecosystem. For today’s startups, it provides the trust framework and regulatory foundations required for innovation at scale.

“The real shift is this: Open Banking is no longer the end product; it is the starting point,” he says. “For today’s fintech startups, the opportunity lies in what comes next. We are moving rapidly toward Open Finance and, more broadly, smart data where consumers and businesses can securely share a wide range of financial and non-financial data. This expansion will unlock entirely new categories of products and services, from more holistic financial wellbeing tools to smarter lending, insurance and wealth solutions.”

Mere Access Just Isn’t An Edge Anymmore

Aaron Holmes, CEO at Kani Payments, underscores the point that Open Banking alone is no longer a differentiator. According to holmes, “Open banking remains a critical foundation for UK fintech, but it is no longer a differentiator in its own right. It has done what it set out to do, which was to standardise access to financial data and lower the barriers to entry. Today, that access is now expected as standard. The challenge for startups now is what they do with it.”

Holmes emphasises that the real competitive edge now comes from building intelligence, accuracy and trust on top of this data.

“The next wave of innovation is not being driven by access to data, but by what firms build on top of it. However, as products scale, the real complexity emerges behind the scenes, in how that data is interpreted, reconciled and controlled under increasing regulatory scrutiny. For many fintechs, particularly those operating in payments and virtual money, the pressure is not just to access data, but to ensure it is accurate, auditable and regulator ready. That is becoming a defining factor in long-term success. Open banking is still essential infrastructure, but the competitive edge now comes from building intelligence, accuracy and trust on top of it, rather than relying on access alone.”

Building on the Baseline

Marko Sjoblom, CEO of Fiinu plc, describes Open Banking as the “starting line” rather than the prize. “Open Banking isn’t the differentiator anymore, it’s the starting line. The real innovation is what you build on top of it. At Fiinu, we’re taking a credit-first approach, similar to what Nubank achieved, using real-time data and AI to offer fair, flexible credit based on how people actually manage their money today. That has real-world impact.”

He highlights the scale of opportunity for fintech startups leveraging Open Banking to solve tangible problems, like SME late payments, which cost the UK £11 billion annually. “As the Prime Minister highlighted this week, SME late payments cost the UK £11 billion annually. Our Plugin Overdraft sits on top of existing bank accounts and can help retail and SME customers avoid missed payments and fees, potentially supporting up to 20 million people. We’re building the infrastructure for a European equivalent of Nubank, expanding access to credit, not restricting it. Open banking may be the baseline now, but its impact is still underestimated. In 10 years, we’ll look back and wonder why we didn’t see just how transformative it would become.”

The Next Phase? Open Finance and Smart Data

The consensus among experts is that Open Banking remains a vital foundation, but startups must view it as part of a broader ecosystem. From predictive, AI-driven insights to embedded finance, the next generation of fintech innovation will layer technology, intelligence and real-world problem-solving on top of Open Banking’s data infrastructure.

As Cox summarises, “The most successful startups will be those that treat Open Banking as part of a broader innovation stack, combining it with Open Finance, Smart Data and cutting-edge technology to solve real-world problems. If anything, we are only at the beginning. The next phase of fintech innovation in the UK will not move away from Open Banking…it will build on it.”

For UK fintech startups, the challenge is clear: Open Banking provides the runway, but it’s what you build in the air that counts.