Open Banking continues to outperform on fraud

Open Banking has long been promoted as a safer, more controlled alternative to legacy payment rails.

Open Banking outperforms on fraud

New evidence from Open Banking Limited’s latest financial crime update reinforces that claim — but also reveals a more nuanced risk landscape emerging as adoption scales.

Covering data from March 2024 to September 2025, the report provides the most detailed longitudinal view yet of fraud patterns within Open Banking payment journeys.

At a headline level, Open Banking-initiated payments continue to experience materially lower fraud rates than the wider payments industry, both by volume and by value.

Yet beneath that reassuring aggregate picture sits a growing concentration of risk tied to Authorised Push Payment (APP) fraud — a trend that mirrors wider structural pressures across UK payments.

Fraud Rates Remain Lower Than Industry Benchmarks

When compared with industry data published by UK Finance for H1 2025, Open Banking fraud volumes stand at just 0.013 per cent of transactions, versus an industry average of 0.045 per cent.

In value terms, the gap is similarly pronounced, at 0.020 per cent for Open Banking compared with 0.027 per cent across other payment methods.

Notably, these figures represent an improvement on Open Banking’s own performance in 2024, while industry fraud rates have risen over the same period.

This divergence suggests that Open Banking’s design principles — strong customer authentication, real-time data access and payment initiation controls — are translating into tangible resilience as fraud elsewhere accelerates.

However, the report cautions against complacency.

The relatively low incidence of fraud masks the fact that Open Banking transactions tend to be higher in value, meaning that losses, when they occur, can be more severe.

APP Fraud Dominates Open Banking Threatscape

APP fraud now accounts for 74 per cent of all Open Banking fraud cases.

This is a striking figure, but one that reflects the channel’s primary use cases: account-to-account transfers, savings movements and high-value purchases.

Unlike card payments, it does not carry a long tail of low-value transactions, which helps explain why average fraud values — £707 per incident — exceed the industry norm.

Crucially, this does not indicate a unique vulnerability in Open Banking itself.

Instead, the report shows that fraud typologies are broadly consistent with those seen across Faster Payments, including impersonation scams, investment fraud and social engineering attacks.

Open Banking is simply one of several rails through which APP fraud is being executed.

Recent Increases Appear Cyclical Rather Than Structural

While fraud levels remained stable between September 2024 and May 2025, the data shows a modest uptick in both fraud volume and value over the subsequent four months.

By September 2025, fraud volumes had risen to 0.023 per cent, with value-based measures climbing more sharply.

Importantly, Open Banking Limited stops short of attributing this rise to Open Banking-specific weaknesses.

Anecdotal evidence from banks and payment service providers suggests a broader increase in fraud across payment methods during the same period, supported by Pay.UK data showing higher Faster Payments fraud in mid-2025.

Some providers report no meaningful deviation from historical norms, reinforcing the view that the increase is uneven and ecosystem-wide.

Data-Led Controls Are Emerging as the Key Defensive Lever

One of the most strategically significant findings in the report concerns Transaction Risk Indicators (TRIs).

These data fields, shared between Payment Initiation Service Providers and banks, provide contextual information about a transaction’s purpose, merchant relationship and risk characteristics.

Pilot programmes indicate that TRIs can materially improve fraud detection while reducing false positives — a critical balance as Open Banking volumes scale.

The report makes clear that better data exchange, rather than additional friction, represents the most credible path to sustaining low fraud rates.

A Test of Maturity for Ecosystem

The report ultimately paints Open Banking as a maturing payments channel rather than an experimental one.

Fraud levels remain lower than traditional alternatives, but the ecosystem is increasingly exposed to the same sophisticated, AI-enabled fraud techniques affecting the wider industry.

The challenge now is not proving that Open Banking is safer, but ensuring that its standards, data frameworks and collaboration models evolve quickly enough to stay ahead of professionalised fraud.

In that sense, the findings should be read less as a warning and more as a marker of success: Open Banking has become significant enough to be targeted — and resilient enough to respond.