The second financial services revolution? The quiet politics of open banking reform in the UK

Open banking was heralded as the key to promoting competition in UK retail banking markets. After a slow start the post-pandemic uptake of open banking tools suggested that a second financial services revolution was indeed underway. Yet by 2024 there were also clear signs that the so-called silent revolution had failed. The aim of this paper is to explain why. Using Culpepper’s (2010) concept of ‘noisy politics’ we argue that against the background of disillusionment with incumbent banks a more incisive, pro-reform statecraft emerged during the design of open banking (2015-18); under these conditions incumbent bank power waned. However, the return to ‘quiet politics’ – compounded by the political uncertainty surrounding Brexit and the delegation of authority to technocratic institutions – allowed incumbent banks to slow the implementation process (2018-23) and reorient their strategy towards acquisitions and partnerships with technologically agile fintech firms. In so doing bank power reasserted itself, stymieing the progress of open banking reform.