I was asked to comment on Open Banking by a journalist working with the Institute of Chartered Accountants. This is a brief transcript of that conversation. Interestingly, we’ve also had contact this afternoon from a business looking to do EXACTLY what we’ve suggested in question 4… great minds and all that.<\/p>\n

Open Banking has been called the revolution that never was, with few consumers knowing about it – why has it been so slow to emerge?<\/strong>
\nThat\u2019s a tricky question. As a customer experience professional, I don\u2019t believe consumers really know what Open banking is. The principles of Open Banking, and the name itself, are around allowing accounts to be accessed not ONLY through the account holding bank\u2019s apps and websites. That in itself isn\u2019t exciting. It\u2019s technologically complex and has eaten untold budgets across the major high-street banks, but for consumers that doesn\u2019t convey much of a benefit. The benefits are around what\u2019s POSSIBLE through open banking \u2013 true visibility of your finances, allowing for best planning, product choice, account switching, and ALL to the best benefit of the customer and brand agnostic. That opens the door for infinitely flexible money management and budgeting across every aspect of your life. Automatic mortgage switching, maximising your pension, allowing you to put away money for your summer holiday in the most effective way AND purchase the holiday at the best price. This is the promise of open banking. Right now, we\u2019re at the point where most banks have added an \u2018add an account from another bank\u2019 button and that\u2019s about it. As such, there\u2019s not much customer benefit to shout about. Yet.<\/p>\n

Fintech apps that help users budget and save seem to be the main beneficiaries of Open Banking data sharing – is this a lack of ambition from the sector, or just initial progress?<\/strong>
\nThere\u2019s plenty of ambition in the sector. There have been good attempts to start to leverage the opportunities of open banking, but they\u2019ve been fairly sporadic and often felt quite experimental. Yolt (from ING) has a stated aim to \u201cTo give everyone the power to be smart with their money.\u201d That\u2019s the promise of Open Banking, in a nutshell. With the agency I work for (Splendid) we worked with HSBC on a forward-thinking app called Connected Money. Again, this was primarily about money management and meeting the normal budgeting needs of most customers. So there\u2019ve been plenty of experiments. HSBC have now discontinued the Connected Money app, in order to merge the features into the main mobile banking app. So that\u2019s a good instance of initial progress. We\u2019ve also worked with other banks on similar features, so the ambition within the sector is definitely there, and the need from a customer perspective, to be able to maximise their budget, has always existed.<\/p>\n

Has Covid-19 accelerated the lending industry\u2019s adoption of open banking and access to real-time data in a fast changing environment for individuals\u2019 finances?<\/strong>
\nMost high-street banks and lenders have most likely seen an increase of usage of their digital platforms throughout Covid-19, for a couple of reasons. A) Physical factors \u2013 the inability\/concerns around visiting a branch, B) volatility \u2013 many people have been financially affected by Covid-19, and therefore have had to interact with their budgets and financial planning in ways they previously wouldn\u2019t have from month-to-month. We\u2019ve also seen reduced branch hours and in fact the industry has been pushing towards a digital by default approach for years, so should be seizing this opportunity to optimise digital engagement with their customers. But not necessary in traditional ways. Providing stronger, better, more powerful budgeting assistance is what customer need. Not just the ability to add an HSBC account to a Barclays app. So identifying the real customer needs and responding to them is what\u2019s required. I strongly believe that the first Financial Services provider (not necessarily a bank) to really meet these needs will take a pioneering role in changing customer mindsets around what a bank is and what they should expect from their financial institution. In many ways, customers have just kind of \u2018accepted\u2019 the offering from banks and it\u2019s frankly miles behind other industries in terms of innovation and digital service. Enabling customers to see that vision and expect more from their bank is the first real step towards customers seeing the benefits of Open Banking.<\/p>\n

What opportunities (and problems) lie ahead for Open Banking?<\/strong>
\nI think the opportunities are in enabling customers to become truly self-managing in their finances in the MOST informed way. Right now we\u2019re all in charge of our own finances and budgets, and use a variety of tools and services to do so, whether that\u2019s access to an IFA or putting spare change into a pot in the kitchen. We\u2019re kind of using what\u2019s available. Improving what\u2019s available is where the opportunity is. And it\u2019s very easy to see the customer-facing benefits of that. The challenge is that being truly open in terms of products is that that doesn\u2019t best-serve the needs of the bank creating the app. So for instance, if I\u2019m in my Barclays app and I\u2019m ready to remortgage, what if the best mortgage option is with HSBC? Do Barclays want to recommend me that product? Therefore I think the challenges include customer retention, product aggregation, accuracy of data. With regard to opportunities, there\u2019s an option to monetise the new, improved service. In effect, we\u2019d be performing the role of an FA \u2013 something people pay for. In much the same way as \u2018premier\u2019 bank accounts exist right now, and come with a fee, the new services could to the same. So the opportunity is the ability to monetise valuable services which leverage the new-found understanding of the customers\u2019 financial situation across all products and touchpoints.<\/p>\n","protected":false},"excerpt":{"rendered":"

I was asked to comment on Open Banking by a journalist working with the Institute of Chartered Accountants. This is a brief transcript of that conversation. Interestingly, we’ve also had contact this afternoon from a business looking to do EXACTLY what we’ve suggested in question 4… great minds and all that. Open Banking has been…<\/p>\n","protected":false},"author":1,"featured_media":418,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"jetpack_featured_media_url":"http:\/\/www.benedictireland.com\/wp-content\/uploads\/2020\/08\/gettyimages-632583434-scaled.jpg","_links":{"self":[{"href":"http:\/\/www.benedictireland.com\/index.php?rest_route=\/wp\/v2\/posts\/415"}],"collection":[{"href":"http:\/\/www.benedictireland.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.benedictireland.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.benedictireland.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.benedictireland.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=415"}],"version-history":[{"count":3,"href":"http:\/\/www.benedictireland.com\/index.php?rest_route=\/wp\/v2\/posts\/415\/revisions"}],"predecessor-version":[{"id":444,"href":"http:\/\/www.benedictireland.com\/index.php?rest_route=\/wp\/v2\/posts\/415\/revisions\/444"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.benedictireland.com\/index.php?rest_route=\/wp\/v2\/media\/418"}],"wp:attachment":[{"href":"http:\/\/www.benedictireland.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.benedictireland.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=415"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.benedictireland.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}