The European financial landscape is currently navigating a period of profound transformation, where the promise of unprecedented payment innovation is directly challenged by the escalating sophistication of financial crime. This year marks a critical juncture for the Open Banking ecosystem, a time when the foundational work of the past eight years is set to blossom into mainstream services while simultaneously creating fertile new ground for fraudsters. As the industry moves decisively from a phase of regulatory compliance to one driven by market momentum, stakeholders are grappling with a dual mandate: scaling transformative technologies like commercial Variable Recurring Payments (VRPs) while building a resilient, collaborative defense against the pervasive threat of real-time fraud. This balancing act will ultimately define the success and sustainability of the next era of digital finance, determining whether the ecosystem can deliver on its potential for economic growth and consumer choice without compromising security and trust.
From Mandate to Mainstream Momentum
After years of development, the United Kingdom’s Open Banking initiative has finally shed its reputation as a purely regulatory exercise to become a mature and mainstream component of the nation’s financial infrastructure. The user base has continued its impressive upward trajectory from 2025, when it surpassed 15 million consumers and businesses, representing nearly a third of the UK’s adult population. This sustained growth is expected to accelerate, pushing Open Banking firmly into the realm of everyday usage. Payments remain the undeniable engine of this expansion, with the efficiency and security of account-to-account transactions solidifying their place as a formidable alternative to traditional card networks. The narrative has shifted decisively from mandate to real momentum, with the ecosystem’s focus now squarely on responsibly scaling this adoption. A key part of this strategy involves upholding the high standards of the established trust framework to ensure that as Open Banking grows, it continues to enhance consumer choice and contribute positively to broader economic prosperity without faltering. This transition signals a fundamental shift in perception, where Open Banking is no longer seen as an obligation but as a core commercial opportunity for innovation and market competition.
This newfound maturity is further evidenced by a significant phase of market consolidation, a classic indicator of an industry where key players are now competing for scale and strategic dominance. This trend was underscored by major acquisitions in the latter half of 2025, such as TrueLayer’s purchase of Zimpler and Mollie’s agreement to acquire GoCardless. Such moves are fundamentally reshaping the account-to-account ecosystem, creating larger, more resilient entities capable of challenging legacy systems on a continental scale. For instance, the combination of TrueLayer’s pan-European network with Zimpler’s deep expertise in the Nordic markets creates a powerhouse positioned to accelerate the migration away from traditional card infrastructure. This consolidation is not merely about size; it is a strategic maneuver to build integrated networks that can offer more comprehensive and seamless payment solutions across borders. As the market continues to evolve, this trend is expected to continue, leading to a landscape dominated by a few highly capable providers who can deliver the scale and reliability required for mass-market adoption and competition with incumbent payment giants.
The Watershed Moment for Recurring Payments
Perhaps the most anticipated development of the year is the full-scale commercial rollout of Variable Recurring Payments, an innovation widely hailed as a game-changing moment for the entire payments industry. Following groundwork laid in late 2025, the newly established UK Payments Initiative (UKPI)—a powerful coalition of 31 leading Open Banking and payments organizations including GoCardless, Mastercard, and TrueLayer—is spearheading the launch of the first commercial VRP scheme. The first live transactions at scale are already occurring in the first quarter, marking what many experts describe as a watershed moment that will demonstrate Open Banking’s real-world economic impact far beyond its initial compliance-driven era. VRPs are set to unlock a host of new use cases for recurring payments, offering consumers unprecedented flexibility and control while providing businesses with a more cost-effective and reliable alternative to legacy methods like Direct Debit and card-on-file payments. This technology is not just an incremental improvement but a fundamental reimagining of how recurring transactions are managed.
Despite the immense excitement surrounding the launch of VRPs, industry experts are advocating for a realistic outlook on its initial adoption curve. The consensus is that while the long-term potential is enormous, transaction volumes will likely emerge slowly at first before building significant momentum throughout the latter half of the year. This measured rollout is a strategic necessity, allowing the ecosystem to meticulously refine the end-user experience, build widespread consumer trust, and iron out any unforeseen technical challenges. Organizations that have worked for years to bring recurring Pay by Bank to fruition understand that success depends on a flawless and intuitive customer journey. This gradual but steady approach will ensure that as VRPs scale, they do so on a solid foundation of reliability and security. The launch itself stands as a testament to what the industry can achieve through dedicated collaboration and is a huge milestone that paves the way for a more dynamic and user-centric payments landscape.
Building the Foundation for a Broader Data Economy
While Open Banking matures, this year is proving to be critical for laying the foundational groundwork for Smart Data—the ambitious extension of data-sharing principles to other vital sectors of the economy, including energy and transportation. With the passage of the Data Use and Access Bill in 2025, the necessary legal framework is now in place, empowering the creation of new data-sharing schemes projected to generate approximately £10 billion for the UK economy over the next decade. Rather than focusing on large-scale public launches, the immediate priority is on exploration, collaboration, and the development of robust recommendations. Critical work is being undertaken within specialized working groups and pilot programs to shape the technical, regulatory, and architectural frameworks for future deployment. Key areas of focus include establishing interoperability standards across different sectors, developing frameworks for secure machine-to-machine consent, and building sophisticated trust layers capable of accommodating interactions with emerging technologies like agentic AI, moving these concepts from theoretical discussion into concrete implementation requirements.
However, a pressing concern among industry leaders is that the UK and European ecosystems risk falling behind more agile global regions if they fail to fully capitalize on the broader strategic opportunities presented by Open Finance. With regulatory frameworks like PSD3, the Payment Services Regulation (PSR), and the EU’s Financial Data Access (FiDA) framework solidifying, financial institutions are being strongly urged to shift their perspective. The prevailing view is that regulation should no longer be treated as a mere box-ticking exercise but rather as a strategic catalyst for innovation and commercial growth. This requires a fundamental change in mindset, compelling banks to evolve from being passive data providers into active data consumers. By embracing the data economy, institutions can unlock enhanced datasets for more accurate credit scoring, create new revenue models, and deliver the highly personalized financial guidance and products that modern consumers demand. As one expert powerfully stated, “Regulation is the baseline, not the conclusion,” highlighting the urgent need for a proactive approach to keep pace with the innovative financial service distribution models emerging worldwide.
A Year Defined by the Fight Against Fraud
The global push for real-time payments was an unstoppable force, yet it brought with it an equally powerful and dangerous challenge: instant fraud. With over 80 countries having deployed instant payment schemes and estimates projecting that one in four global payments would be real-time by 2028, the benefits in speed and efficiency were clear. However, this shift meant that the value of fraud in the European Economic Area rose to a staggering €4.2 billion in 2024, creating an environment where “instant payments also mean instant fraud.” This reality forced the issue of security to the top of the agenda for every financial institution. The implementation of the Instant Payments Regulation in Europe made real-time transactions the new default, inadvertently creating a fertile ground for criminals to exploit. Consequently, industry investment in fraud detection and prevention was forecast to nearly double from $21 billion in 2025 to $39 billion by 2030, reflecting the scale of the threat.
This escalating arms race between innovation and security became the defining theme of the year. The removal of the €100,000 limit on instant payments created a perfect breeding ground for fraudsters to devise new and more sophisticated attack vectors. Furthermore, the upcoming Payment Services Regulation intensified the pressure by shifting more liability for fraudulent payments away from consumers and onto payment service providers. This regulatory pressure compelled banks to massively invest in uplifting their fraud prevention capabilities, moving beyond traditional methods to embrace advanced AI and machine learning models. A key strategy that gained significant traction was the collaborative sharing of fraud-related data, potentially through secure APIs, to create a more unified and proactive defense. This approach acknowledged that financial crime is an ecosystem-wide problem that could not be solved by any single institution acting in isolation, marking a crucial step toward building a more secure digital economy.
