The updated directive, accompanied by a new Payment Services Regulation (PSR1) should strengthen open banking and support the development of a vibrant and healthy ecosystem, but to maximise its impact we need to ensure all voices in the space can be heard. If this can be done successfully, the result should be an open banking ecosystem that can continue to scale while becoming more reliable, resilient, and efficient.

If this can be achieved, it would benefit the broader fintech sector too, especially considering the momentum that is building behind open banking.

Across the EU, as well as in the UK, solutions that leverage the open banking infrastructure are becoming increasingly commonplace in the daily operations of businesses and amongst individuals. While the recent growth and momentum is encouraging, I believe that with the right approach, we can go further and unlock the vast untapped value of open banking to a wide cohort of individuals and businesses.

Moment of maturity

The open banking sector is beginning to mature, and we’re starting to see the wide range of products and services that can be built on the framework established by PSD2. But only by bringing a diverse range of stakeholders into the fold can we ensure that the full scope of open banking-based solutions can be brought to market. Alternative viewpoints will help uncover a greater breadth and depth of use cases – and this will be instrumental in moving the open banking sector into the financial services mainstream.

Taking one specific example, the regulatory bodies overseeing the development of open banking must make sure they are not disproportionately influenced by the concerns of legacy financial institutions, such as banks. By focusing too much on stakeholders from traditional financial institutions, those overseeing the next wave of open banking development are in danger of overlooking some of the more innovative players in this space. This has been a criticism of the first ‘wave’ of open banking – and it should be addressed as we enter this new phase.

Embracing inclusivity

We’re beginning to see much greater representation of female leaders within certain elements of the open banking ecosystem, for example, the UK’s Open Banking Implementation Entity (OBIE), which has selected two female leaders in recent times in Charlotte Croswell and Marion King. However, the number of female founders and female executives within the broader field still remains low. Collectively, the open banking sector can do more work to ensure that it is effectively promoting inclusivity.

Speaking personally, it’s alarming how often I find myself serving as the lone female voice in discussions around open banking. As one of relatively few female CEOs operating in this space, I perhaps notice this issue more acutely than others. Still, the numbers back up my point. Despite calls for increased levels of diversity in finance, only around 28% of women were represented at a senior level in finance in 2021.

Within the broader tech field, female founding teams are also vastly under-represented. All-women founding teams only raised 1.6% of the capital allocated in the first half of 2023, and worryingly, that figure is the lowest it’s been since 2017. Clearly, any improvement here would be welcome. While there’s limited research around levels of gender inequality in the open banking subset of fintech specifically, I would be surprised if it deviated significantly from the sector as a whole.

The importance of diversity

By actively engaging diverse stakeholders, this next phase of open banking can generate considerable value from greater inclusivity. In a field like open banking, which is all about problem-solving, this becomes even more important. Ultimately, you need to understand the problems that different people face and be able to recognise that those problems are influenced by things like gender, age and socioeconomic background. Building solutions that are accessible for all require these insights, otherwise, they’re destined to miss the mark.

At Brite, diversity is in our DNA. We’ve worked hard to build a high-performing, but supportive, working culture. One that values inputs from all people, irrespective of gender, or cultural background. That’s why we’ve attracted standout fintech professionals representing more than 20 different nationalities. This genuine diversity has helped us to identify areas of opportunity that others may have missed.

Take for example our Brite Instant Payments Network (IPN), which aims to bridge the fragmented European instant payments landscape, including enabling instant payments and payouts in non-Eurozone countries. As such, it’s helping us to build a true European-wide open banking payments solution, which eliminates the need for settlement accounts, covering 25 markets in a single API. It’s increasing the accessibility of open banking payments for more businesses and consumers across the continent.

Building on solid foundations

To develop the truly game-changing open banking solutions of tomorrow, we need to ensure we’re building solid foundations today. While updates to regulations like PSD3 are important, so too is the workforce we’re building collectively as a sector. As the industry begins to come of age, it’s finally time to start taking issues like this much more seriously as they will only hold us back in the long run and impede the full potential of open banking.