Expert: Vaughan Jenkins, Moneyhub Facilitator: Robert Harradine (Ammonite)
Headlines
- Open Finance is key to evidencing outcomes and assessing affordability, eligibility, suitability, and vulnerability
- Building a data lake of consent-based customer information will become an increasingly valuable business asset
- A positive customer value exchange is key to building trust and to encouraging the adoption of Open Finance banking: “you allow us to analyse your data and we will provide a more relevant, useful and timely service in return’
Context:
Open Banking is on the rise as a lower cost payments option, but account aggregation (AIS) is the route to consumers being able to improved outcomes by leveraging their data. Access to data and portability form part of GDPR but Open Finance paves the way to Open Data.
It was disappointing not to see Open Banking and Open Finance mentioned in the recent Consumer Duty (FCA paper) especially given the FCA’s previous Open Finance consultation.
The Financial Services industry in general is being pretty dumb in that firms are not using the personal data they have to help the customer experience. Smart data means a change of culture and attitudes to put customer experience about pushing product. This is aligned to the Consumer Duty principle.
Open Finance is already here – Moneyhub already aggregates over 700 products from more than 200 UK financial institutions. Consumers want to understand what they’ve got; how they are doing and if there’s anything they could do to achieve their goals. Control over their finances is often cited by consumers as what they want. This is especially true of the mid-life ‘sandwich’ generation – between the end of childcare and parental care. This group are key adopters of Open Finance tools.
Key takeaways:
- Open Banking should be a component of assessing Consumer Duty compliance
- The industry is starting to try and create common standards e.g. TISA’s Open Savings, Investment and Pensions initiative but firms should be compelled to make open APIs available for consumers to securely access and port their data
- Smart Data benefits will best be realised via legislation, although more can be done now than many realise
- Early adopters are gaining a competitive advantage which needs to be more widely reported
