BANKING
In January 2018 the Competition and Markets Authority quietly announced an initiative that has since shaken up the way UK banks hold customer data - and who has access to it. That initiative was called Open Banking. Today, two and a half years on, it is on the cusp of living up to its potential. Open Banking modified the strict rules that govern the use of bank customers’ financial information. By granting limited access to this data to trusted, and vetted, third party businesses, it sought to spur the creation of new products and services that consumers would find useful. Before the introduction of Open Banking, it’s safe to say the banking industry was not famed for its innovation. That’s not to say innovation was not happening. The shift to chip and PIN, and then on to contactless card payments, as well as changes to ATM machines and the arrival of mobile banking, are merely the most visible examples of technological progress. Since the Global Financial Crisis, successive UK governments have sought to inspire more competition in both the banking industry and the wider financial services sector. A decade ago, London’s fintech melting pot sprang out of the nexus between City knowhow and Shoreditch’s tech entrepreneurs. Fuelled by thousands of overpriced flat whites, the two strands fused to create new and innovative ways to help people manage and invest their money.
Banking are everywhere. Consumers can see all their finances in one place, and the financial services sector is packed with new and exciting tech-led offerings, from budgeting apps to savings and investments. But for all the huge strides made, it is fair to say that much of the innovation has been centred on financial services. The original vision for Open Banking - to extend the benefits to other sectors - has remained largely unfulfilled. Until now that is. Other sectors are finally starting to reap the rewards. Take retail for example. This summer saw the UK launch of Recash, a retail cashback app powered by the Open Banking freedoms that was originally developed in Hungary. The free app has a simple, compelling pitch to consumers – it allows them to upgrade their bank card into a cashback card. It takes seconds to turn any card into a cashback card, which will automatically transfer money back to the shopper whenever they buy something from a participating store. For retailers, the
Open Banking was conceived as a way to extend that creative momentum further. Tech developers who registered as ‘Regulated Providers’ were given access to previously confidential banking data they could then use to create innovative new products. Fast forward to today and the results of Open
IT’S TIME FOR OPEN B 34
