Faith Reynolds, Independent Consumer Representative for the Open Banking Implementation Entity

10 Jun 2019

It’s conference season! Earlier in the month I sat on a panel with Catherine Miller from think tank Doteveryone at the UK Regulators Network conference to discuss regulation and innovation. Catherine shared the results of research conducted across the tech industry that shows a real tension between the enormous opportunities that tech provides and the potential harm it can inflict.

The research found that 59 per cent of interviewees working in AI confessed they’d experienced decisions that could lead to negative consequences for people and society and 29 per cent of this group had left as a result. There’s a growing feeling among techies that tech – like Open Banking – should be a force for good. In fact, 63 per cent want more opportunity to consider the impact of their work on people and society.

More than three quarters (78 per cent) of respondents want help by way of practical resources, workshops etc that help them build technology in a way which considers its impact. This backs up research the Code Collaboration did on a code of conduct for Open Banking – people want help to navigate the ethics landscape.

I was pleased then to contribute to a new playbook by consultancy Greater than Experience on rebuilding trust in financial services. This is a free, practical resource that provides a framework for firms that starts by putting consumers at the centre, follows by offering tools to support clearer and more effective communication of the product and finishes by looking at how to operationalise data ethics. This involves being clear about what your firm believes in, fighting to defend it and optimising your organisation’s activities for socially-preferable outcomes.

Social and financial inclusion were hot topics at other conferences too. Open Banking is seen as a key enabler, especially in developing countries, where firms are utilising the mobile telecoms network to grow access to credit for small businesses and consumers. Mobile money transactions can be shared to allow for better credit checks, allowing businesses, typically starved of credit, to grow and benefit the community.

Closer to home, the Treasury Select Committee’s Access to Cash review was published. The headline finding is that the UK isn’t ready to go cashless because digital payments don’t work for everyone. This suggests the UK has a lot to learn from other countries and could be further exploiting the mobile network to reach under-served areas of the country.

The results of a research project by Andra Sonea at Warwick University, part of the Think Forward Initiative, will be published later this Summer. It will show the financial and digital ‘void’ in the UK.

The Access to Cash Review has recommended that the government, industry and regulators prioritise digital inclusion in payments, which should offer another boost to Open Banking. The risk of overspending and getting into debt is one barrier to the take up of digital payments. PISP work on real-time can offer much greater transparency of what’s left in people’s accounts and what they can still spend. The evolution of Request to Pay will give people the option to pay their bills in chunks as their budget allows, offering much more flexible ways to pay in keeping with the growth in the gig economy.

It’s great to see that Open Banking is working with the FCA Sandbox on payment initiation service (PIS-based) variable recurring payments to test the consumer protection framework and make sure it’s fit for purpose. Variable recurring payments could give people much needed control over stopping and starting payment arrangements – something missing from other options, such as continuous payment authorities.

One of the challenges highlighted in discussions over the last month was the commercialisation and monetisation of Open Banking. Regulators and industry representatives both cited difficulties getting firms to focus on the social inclusion aspects of Open Banking. Similarly, Doteveryone found that revenue, growth targets or incentives were a key barrier to looking at the social impact of tech. But most did not see financial success and responsible practice as being in conflict – it is possible to be both financially successful and deliver socially preferable outcomes. The challenge then is one of innovation – innovation in thinking, prioritising and working, as well as in product.