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The Bank of Italia (BoI) has published new data showing a rapid increase in the number of third-party providers participating in open banking, but interest from customers remains elusive.

Last week, the BoI published a on the use of the country’s open banking system, offering an overview of current trends and its future integration with Italy's payment system.

After launching open banking in 2019, the BoI started a biannual reporting system in 2020 to track the operation of third parties involved in providing open banking services.

According to the BoI’s latest data, by the end of H1 2022 the number of third-party providers that are actively receiving open banking API requests had increased from a small handful to over 80.

The total number of API requests received by all third parties in H1 2022 reached 115m, a tenfold increase compared to the same period in 2020.

Despite this growth, the report notes that the number of end users that have followed these firms into open banking has been “limited”, relative to the total addressable market.

There were 407,000 end users at the end of H1 2022, up from 113,000 at the end of H2 2020.

Despite strong growth in its early years, the vast majority of open banking usage has so far been directed towards account information services (AIS), rather than payment initiation services (PIS).

In H1 2022, 91 percent of open banking API requests were for AIS, while only 9 percent were for PIS.

The BoI notes that the dominance of account information over payment initiation services is likely due to greater ongoing testing of account information services. This also mirrors similar data in the UK and other parts of the EU.

The BoI also suggests that the different rules applied to AIS and PIS respectively may incentivise use of the former but not the latter.

For example, in Italy, third parties can access a customer’s account information four times within a single 24-hour period without their consent. This is known as “unattended access.”

How much are Italians spending via open banking?

Though current usage is limited, the BoI said it expects to see “high growth margins” in open banking in the coming years, once the “market development” phase is completed.

The BoI points to H1 2022, in particular, as evidence that use of open banking for payment initiation is set to increase dramatically.

The total value of all payments initiated via opening banking rose to €183m in H1 2022, a threefold increase compared to H1 2021. Average spend per user also increased significantly during this period to €2,800, up from around €1,700 a year earlier.

BoI regulatory recommendations

In its conclusion, the BoI said that open banking is causing “profound disruption” in how customer data is held and used, and that this will lead to “unprecedented” competition between incumbents and newcomers to the payments sector.

While the BoI is generally pleased with the launch and evolution of open banking in Italy so far, it believes that more can be done at the regulatory level to unlock its full potential.

For example, the BoI expects further improvements to remove all obstacles that could prevent the offer of services or authentication to account holders by third parties.

Making sure there is a level playing field between banks and other providers in accessing payment services is a key part of the European Commission’s current review of the revised Payment Service Directive (PSD2).

Additionally, going forward, the BoI expects open banking use cases to expand beyond information and payments to adjacent financial services.

“Indeed, the online availability of customer data paves the way for services that go beyond those covered by PSD2,” said the BoI.

“The world of open banking could evolve towards broader paradigms, such as open finance, and this is made possible by tools and technologies such as artificial intelligence, Big Data and distributed ledger.”

For the BoI, the “stand out” initiative for mapping the evolution of open banking is , a project developed by Berlin Group22, an association of Europe’s most influential payment system operators.

According to the BoI, NextGenPSD2 would reduce the number of existing standards while promoting secure access to accounts and other forms of open, innovative services.

NextGenPSD2 is a set of technical specifications and messaging standards for communication between banks and third parties, which are periodically reviewed.

The BoI also gives honourable mentions to several national initiatives that have similar aims as NextGenPSD2, including the PSD2 Polish API, the French STET PSD2 API and the Portuguese SIBS Forward Payment Solutions.

Finally, the BoI endorses the Working Group on a SEPA API Access Scheme, a public-private cooperation led by the ECB that focuses on payment initiation services in open banking.

“This scheme should constitute a real multilateral agreement which, similar to those governing the functioning of card schemes and the SEPA transfer and direct debit schemes, should define the rules of operation and governance for payment initiation services,” said the BoI.