Open Banking Continues to Outperform on Fraud

Why It Matters

The findings confirm Open Banking’s resilience against fraud while flagging emerging APP‑related risks that could affect high‑value transfers, urging the ecosystem to adopt richer data controls.

Key Takeaways

• Open Banking fraud rate 0.013% vs 0.045% industry
• APP fraud makes up 74% of Open Banking fraud
• Average Open Banking fraud loss £707 per incident
• Transaction Risk Indicators improve detection, cut false positives
• Fraud uptick cyclical, mirrors broader UK payments rise

Pulse Analysis

Open Banking continues to prove its security advantage as the latest Open Banking Limited report reveals fraud rates well under one‑tenth of the broader payments industry. Strong customer authentication, real‑time data access, and payment‑initiation controls have translated into a 0.013 % transaction fraud rate, while industry averages sit at 0.045 %. This gap has widened even as overall fraud pressures have risen, positioning Open Banking as a low‑risk alternative for businesses seeking reliable, high‑value transaction pathways.

The report, however, uncovers a concentration of risk in Authorised Push Payment (APP) fraud, which now accounts for 74 % of all Open Banking fraud incidents. Because Open Banking is primarily used for account‑to‑account transfers and high‑value purchases, each successful scam carries a larger monetary impact, with average losses of £707 per case—significantly above the card‑payment norm. The typology mirrors scams seen across Faster Payments, indicating that Open Banking is not uniquely vulnerable but rather another vector for sophisticated impersonation and social‑engineering attacks that target the broader UK payments ecosystem.

To sustain its fraud advantage, the industry is turning to data‑led defenses, notably Transaction Risk Indicators (TRIs). These fields share contextual details about transaction purpose, merchant relationships, and risk characteristics between payment initiation service providers and banks. Early pilots suggest TRIs can boost detection accuracy while reducing false positives, offering a scalable solution as transaction volumes grow. The challenge now lies in standardising these data exchanges and fostering collaboration across banks, fintechs, and regulators to stay ahead of AI‑driven fraud tactics, ensuring Open Banking remains a secure, mature payment rail.