93% of UK Businesses Demand Bank-Level Regulation for Open Banking Providers

UK businesses are rapidly adopting Open Banking, with nearly half now using the technology, but trust has replaced awareness as the primary hurdle for further growth. New research from Payit by NatWest highlights that while 94% of firms plan to trial these payments, they increasingly demand bank-grade regulatory protections and robust security.

What was announced

The latest Frictionless Payments research from Payit by NatWest reveals a significant shift in the UK’s Open Banking landscape. While last year’s data showed that 28% of businesses avoided the technology due to a lack of understanding, adoption has now reached 47%. Furthermore, 94% of surveyed businesses indicate they are likely to trial Open Banking as a payment method within the next 12 months. This transition from an unfamiliar technology to a considered payment option has moved the industry's focus toward provider credibility.

The research emphasizes that business confidence is tied to regulatory oversight. Approximately 93% of respondents stated it is very or extremely important for Open Banking providers to be subject to the same requirements as traditional banks. Security is also a primary motivator, with 34% of businesses noting that improved fraud prevention would encourage adoption, while 27% would be more likely to use services offered by well-known financial institutions.

Operational challenges continue to plague UK firms, with 59% reporting that current payment processes lead to late payments. Additionally, 55% of businesses struggle with a lack of integration between payment systems and existing infrastructure. Speed remains a critical pain point; 55% of businesses find customer payments too slow, an increase from 49% in the previous year. These delays have tangible commercial consequences, with 23% of affected businesses reporting increased operational costs and 20% stating that payment friction limits their growth potential.

"Businesses are increasingly open to new ways of making and receiving payments, but the experience needs to be faster, simpler and more secure. Just as importantly, businesses want confidence that the providers they work with are held to the right standards."

James Hodgson, CEO of Payit by NatWest

The companies involved

Payit by NatWest is an Open Banking-based payment solution developed by NatWest, one of the UK’s "Big Four" clearing banks. The service allows businesses to collect payments from customers in real-time without requiring the customer to share card details or use a physical card. By leveraging the UK’s Open Banking infrastructure, Payit aims to reduce the costs and friction associated with traditional card-based transactions.

Its parent company, NatWest, maintains a significant presence in the UK financial services market, serving millions of personal, business, and institutional customers. The bank has been a prominent figure in the development of the UK's fintech ecosystem, often participating in industry-wide initiatives to modernize banking infrastructure. The research also features insights from Charlotte Crosswell, who previously served as the Chair and Trustee of Open Banking Ltd, the entity responsible for delivering the UK's Open Banking standard. Crosswell also holds roles as an Independent Non-Executive Director at the London Stock Exchange and Innovate Finance, reflecting the high-level regulatory and industry interest in the evolution of payment standards.

What FF News has reported before

NatWest has remained highly active in the UK’s digital transformation efforts throughout late 2026. FF News recently reported that NatWest, Nationwide and HSBC UK Join CFIT Coalition to Revolutionize Financial Inclusion, a move aimed at leveraging data to improve access to financial services. The bank has also been exploring advanced technology to improve customer experience, as seen when NatWest and NVIDIA Partner to Master UK Accents with AI Speech Recognition.

In the broader capital markets, the bank was recognized when the UK Treasury Appoints Major Banks to Lead Digital Gilt (DIGIT) Pilot Issuance, signaling NatWest’s role in the future of digitally native government bonds. Additionally, the bank has focused on its engagement with the business community, as NatWest Drives 23% Brand Lift Using Targeted Programmatic Video for SME Banking, demonstrating a concerted effort to reach small and medium-sized enterprises.

What this means

This research signals that Open Banking has moved past its "education phase" and into a "trust phase." For non-bank Third Party Providers (TPPs), the data is a warning: the vast majority of businesses still view traditional banking regulation as the gold standard for security. This puts immense pressure on fintechs to prove their resilience or seek closer partnerships with established banks to gain market share. The fact that payment speed frustrations are actually increasing suggests that while the technology exists, the current implementation has not yet solved the cash-flow anxieties of the UK business sector. The industry must now bridge the gap between technical capability and regulatory confidence.