Open Banking is revolutionising financial services in the UK and now further afield, establishing the nation as a global leader in fintech innovation.
APIs, the backbone of Open Banking, enable seamless data sharing, drive payment processing efficiencies and power customer-centric solutions.
However, the UK’s competitive edge in this field faces challenges, as revealed in the 2023-2024 UK Open Banking API Performance Report, conducted by APIContext in partnership with tomato pay.
Drawing insights from over 8 million API test calls across 29 UK banks, the report highlights areas of progress, persistent gaps and implications for the future.
Why API Performance Matters
Open Banking APIs are pivotal in building interconnected, secure and innovative financial ecosystems.
They underpin everything from frictionless payment transfers to personalised financial management tools.
Yet, underperforming APIs not only disrupt user experiences but also lead to increased engineering costs and could jeopardise the UK’s position as a fintech leader.
Tracking and benchmarking API performance annually helps banks and fintechs identify improvement areas, ensuring the infrastructure supports a robust Open Finance future.
Key Findings: Progress and Challenges
The report reveals a mix of advancements and setbacks across the Open Banking ecosystem.
1. CMA9 Banks Narrow the Gap
The UK’s largest banks, collectively known as the CMA9, demonstrated significant progress in reliability and speed. Historically lagging behind neobanks, these institutions have invested heavily in infrastructure and digital transformation, allowing them to close the performance gap. Their improvements reflect a growing commitment to modernisation and customer-centric service.
2. Neobanks Face New Challenges
Digital-first neobanks, including Tide and Monzo, continue to lead the pack in terms of speed and availability, with near-perfect uptime and superior user experiences. However, the performance gains seen in previous years have plateaued, raising concerns about how these challengers will maintain their competitive edge amid increasing pressure from traditional players and infrastructure demands.
3. Traditional Banks: Slow but Steady Progress
Smaller, traditional banks showed incremental improvements, moving from the “Yellow Zone” to the “Green Zone” in the CASC (Cloud API Scoring Criteria) ratings. Despite this progress, they remain far behind neobanks and CMA9 counterparts in API speed and reliability. High latencies, often exceeding 4,500 milliseconds, and outdated infrastructure continue to hinder their performance.
4. Cloud Provider Performance
The report underscores the critical role of cloud providers in API performance:
- AWS and IBM Lead: Amazon Web Services (AWS) and IBM continue to dominate, offering the fastest and most reliable hosting environments. Their p99 latencies often fall below 600 milliseconds, making them the preferred choice for critical financial applications.
- Azure Underperforms: For the third consecutive year, Microsoft Azure significantly lagged behind, with DNS lookup times increasing by 80% compared to 2022. Northern European Azure data centres experienced latency exceeding 2,000 milliseconds, creating a bottleneck for banks reliant on this platform.
- Google Cloud Falls Short: Google Cloud also struggled, particularly in Northern and Eastern Europe, further highlighting regional disparities in cloud performance.
5. Data Centre Insights
Infrastructure location continues to influence performance. The Akamai Connected Cloud (ACC) and AWS UK data centres provided the best results, with p99 latencies averaging just over 1,000 milliseconds. These locations demonstrate the importance of selecting optimised data centres for hosting Open Banking services.
Lessons from Three Years of API Monitoring
The annual reports provide a valuable perspective on the evolution of Open Banking:
- Neobanks’ Early Lead: Neobanks established themselves as benchmarks for API reliability and speed. However, maintaining this edge in a maturing market presents a growing challenge.
- CMA9 Resilience: Incremental yet steady improvements by the CMA9 reflect the benefits of sustained investment in modernisation.
- Cloud Provider Impact: The “cloud wars” continue to influence API performance, with Azure’s persistent struggles showcasing the need for cloud optimisation.
Implications for Global Markets
As Open Banking transitions into Open Finance, the UK’s performance serves as a global blueprint. Countries in Europe, Asia and the Americas adopting Open Finance frameworks can draw lessons from the UK’s successes and shortcomings. Key takeaways include:
- Investing in reliable cloud infrastructure to minimise latency.
- Ensuring robust API performance to support real-time, customer-centric solutions.
- Addressing challenges like infrastructure bottlenecks and regional disparities.
The Path Ahead
Maintaining its leadership in Open Banking requires the UK to address persistent issues while fostering innovation.
This includes:
- Modernising Infrastructure: Banks and fintechs must prioritise investments in cloud optimisation and data centre performance.
- Enhancing Collaboration: Stakeholders across government, banking and fintech sectors should work together to improve API reliability and scalability.
- Adopting Advanced Technologies: Leveraging AI and machine learning could help monitor API performance and predict potential issues.
As the UK moves toward Open Finance, its Open Banking ecosystem must remain a benchmark of reliability, innovation and efficiency. By addressing infrastructure and performance gaps, the UK can solidify its position as a global leader in digital financial services.
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