Across Europe, millions remain excluded from mainstream financial services, not because they lack economic potential, but because traditional credit assessment fails to capture their reality, says Sopra Steria’s Steven Lenders.
A small business owner with irregular income streams, a recent immigrant without local credit history, or a young professional with student debt but strong earning prospects: all face barriers that data-driven open banking could dismantle. Yet despite regulatory frameworks enabling this transformation, the promise of financial inclusion through open banking remains largely unfulfilled.
"For me, open banking was initially a very promising concept, expected to unlock new services and competition," explains Steven Lenders, Senior Solution Architect in Banking at Sopra Steria. "However, the way PSD2 (the second Payment Services Directive) was implemented turned out to be somewhat disappointing. It didn't fully deliver on its promises."
This disconnect between potential and reality is striking. According to our DBX 2025 Report, 72% of banking decision-makers now consider developing an open banking strategy a high or moderate priority, with 65% viewing it as core to their roadmap. These figures suggest the industry recognises what's at stake. Yet implementation remains defensive rather than transformative.
How defensive compliance blocked innovation
The root of the problem lies in how banks approached PSD2. "Most banks reacted defensively," Lenders observes. "They feared increased competition and focused on compliance rather than innovation. Many did only the minimum required, and the quality of their API implementations was often poor."
This compliance-first mentality created technical fragmentation across the European banking landscape. "To build innovative use cases, fintechs usually have to rely on aggregators to connect with multiple banks," Lenders notes. "This dependency adds costs and complexity. In short, PSD2 hasn't yet achieved the goal of transforming the banking sector."
The result? A system where underbanked populations remain underserved, despite having access to the very data that could demonstrate their creditworthiness. Transaction histories showing consistent income, utility payment records proving financial responsibility, rental payment patterns; all this alternative data exists but remains siloed within individual bank accounts, inaccessible to those who could use it to build financial services for excluded populations.
Alternative credit scoring: open banking's killer application
The DBX Report reveals that among banks classified as "Pioneers" (those with clear future vision and sorted priorities) implementing alternative credit scoring methods is the top focus. This isn't coincidental. Open banking enables lenders to move beyond traditional credit scores by analysing real-time cash flow data, spending patterns, and financial behaviour.
Consider a gig economy worker whose income fluctuates monthly. Traditional credit scoring sees instability. Open banking-enabled assessment sees consistent earning capacity, responsible spending patterns, and reliable bill payments. The difference between denial and approval of credit applications often lies in which data points you can access.
PSD3: fixing the fragmentation
The PSD3 regulation and Payment Services Regulation (PSR), currently in final negotiations with implementation expected by 2026-2027, aim to address these shortcomings by mandating high-performance, standardised interfaces across all banks. "PSD3 and PSR are necessary steps to move beyond box-ticking compliance," Lenders emphasises. "When that happens, fintech services will no longer be seen as competitors but as extensions of the banks' ecosystems."
This harmonisation could finally unlock the inclusive potential of open banking. With standardised, high-quality APIs, fintechs focused on underbanked segments will not need to navigate dozens of different technical implementations. The reduced friction means lower costs for specialty lenders serving niche populations, whether recent immigrants, freelancers, or individuals rebuilding credit after financial hardship.
The recent DBX Report data supports this shift: 62% of banks expect to increase budgets by 10% or more for improving business APIs to connect with partners digitally, while 61% anticipate similar increases for API access enabling embedded finance.
From payments to full financial inclusion: FIDA's broader vision
While PSD3 focuses on payment accounts, the forthcoming FIDA regulation (Financial Data Access framework) extends data sharing to insurance, pensions, investments, and mortgages. This expansion could transform how underbanked populations access a full range of financial products.
"FIDA goes beyond payments," Lenders explains. "It could enable even broader services: embedded insurance, pension optimisation, or personalised mortgage offers. It has the potential to truly open finance by allowing consumers to access and manage all their financial data in one place."
For underbanked populations, this means holistic financial profiles that capture their complete picture. A freelancer might have irregular income but substantial retirement savings. An immigrant might lack local credit history but have strong insurance coverage
from their home country. FIDA would make this data portable and usable across the European financial system.
Real-world examples already demonstrate the model's potential. Payconiq in Belgium enables fast account-to-account payments that reduce transaction costs by bypassing card networks – particularly beneficial for low-income users sensitive to fees. KBC Bank has built an ecosystem around open banking that allows customers to access train tickets, meal ordering, and various services directly through their banking app, creating a trusted financial hub.
The business case for banks: 51% see significant revenue
Despite initial defensive reactions, forward-thinking banks are discovering that serving underbanked populations through open banking creates genuine business opportunities. The DBX Report found that 51% of banks now view financial well-being open banking services as providing significant revenue streams.
Banks with robust strategic foundations but still-developing technologies show the strongest focus on creating inclusive and accessible financial products. They understand that expanding access is not just social responsibility; it's market expansion.
"Banks that build ecosystems and partnerships will strengthen their customer relationships," Lenders notes, pointing to KBC Bank's transformation into a lifestyle platform that transcends traditional banking boundaries. "Such integration allows banks to remain the trusted hub for their customers while leveraging fintech partnerships for specialised services."
The path forward: from promise to reality
For open banking to fulfil its democratising potential, three conditions must be met. First, PSD3 and FIDA must deliver on their promise of standardised, high-quality APIs across all European banks. Second, banks must shift from defensive compliance to strategic ecosystem building, recognising that serving broader populations expands rather than threatens their business. Third, fintechs focused on underbanked segments need the technical and regulatory stability to build sustainable services.
The stakes are substantial. Traditional credit scoring excludes tens of millions of Europeans from financial services, people with economic potential but non-traditional financial profiles. Open banking, properly implemented, could transform how we assess creditworthiness, moving from backward-looking scores to forward-looking analysis of financial behaviour and capacity.
"I hope PSD3 will fix some of the gaps and truly open the market," Lenders concludes. "There's a lot of potential ahead, especially with PSD3 and FIDA paving the way."
The technical infrastructure now exists. The regulatory framework is evolving. The remaining question is whether the industry will embrace open banking's original promise: not just to enable competition between existing players, but to expand access to those historically excluded from the financial system entirely.