David Beardmore, Ecosystem Development Director, at the Open Banking Implementation Entity (OBIE) dives into its current focus and more specifically its latest #powerofthenetwork initiative which is shining a light on the broader Open Banking marketplace as it helps consumers and businesses alike navigate these unchartered waters
In January this year, the Open Banking Implementation Entity (OBIE) announced as part of its 2019 review that Open Banking in the UK had surpassed one million users, and this was continuing to
climb.
Given my connection to Open Banking since inception, I viewed this as a real tipping point – proof of its ideals of bringing more competition and innovation to financial services taking flight. In fact, it was in September 2016, with only two days as the new Commercial Director at the Open Data Institute (ODI) under my belt, that I witnessed Bill Roberts, Head of Open Banking at the Competition Markets Authority (CMA), announce the publication of the report; “Making banks work harder for you”, which kick-started the open banking journey.
Launch day followed on a chilly morning in January 2018, and I was invited onto the BBC Breakfast sofa to explain the benefits of open banking, while the nation ate their cornflakes. As a big fan of open banking, I didn’t have to feign my enthusiasm. I don’t think it’s perfect, or that we have all the answers yet. It has, however, already led to positive changes in the world of banking. I believe it is here to stay, and that the benefits of open banking will continue to be felt by consumers, businesses and society at large.
While I recognise the technical work that will be required to bring about change of this magnitude, we must remember that open banking is not a technical concept. Yes, APIs are central to open banking, but open banking is also about the consumer. Those individuals who give consent to approved and regulated third parties who will then deliver beneficial products and services.
Our call to action at Open Banking is also a response. How can having a more detailed understanding of their accounts help consumers find new ways to make the most of their money? How might those struggling with debt access better advice? How can renters or those with poor credit histories prove they meet affordability criteria? These questions can all be answered with open banking.
However, the story doesn’t only focus on consumers. The SME sector will also benefit hugely from open banking. The first NESTA Open Up Challenge in 2018 that OBIE supported, shortlisted 12 finalists whose products and services reflect the breadth of innovation in financial technology for small businesses: personalised comparison services to find the best-value bank accounts and loans; ‘credit passports’ updated in real time; and marketplaces which enable small businesses to plug into additional fintech apps via their bank account, to name a few.
I mentioned joining ODI at a seminal time for the industry, and the same can certainly be said of OBIE, where I became Ecosystem Development Director in March 2020. We are moving from a programme delivery entity to an organisation that is here for the longer-term to support the ecosystem. The vision I have for the Ecosystem team I’m leading is all about end-user adoption, delivering tangible benefits and improving the lives of consumers and businesses.
Our role is not only to encourage the banks and fintechs to develop new products, but to work alongside them, playing a vital supporting role in bringing forth these changes, and increasing the adoption of products and services powered by open banking. As businesses recognise the significant benefits of immediate settlement, lower transaction fees and fewer opportunities for errors, the growth of open banking payments solutions (PISPs) will follow.
Of course, we are currently living through unprecedented times and the shockwaves of Covid-19 will long be felt on our societies and economies. With this is mind, we launched the #powerofthenetwork campaign in April to shine a light on some of the innovations the wider open banking community is developing to try to help consumers and businesses across the UK in these difficult times.
Some are aimed at society’s most vulnerable, such as Covid Credit, a scheme allowing the self-employed and furloughed workers to prove that their income has suffered as a result of COVID-19. Others include Tully’s payment relief resource, iwoca’s new Open Lending platform, Swoop Funding’s coronavirus hotline, and the creation of Fintech Taskforce, a collaborative initiative led by Trade Ledger, Wiserfunding, Nimbla, and NorthRow.
A number of our TPPs have removed the fees for their products and services, with relief periods introduced by TrueLayer, Experian, Plaid, Citizen, Ordo, Credit Passport and Moneyhub, amongst others. Others have thrown their weight behind public campaigns, with Coconut calling on the Chancellor to do more for self-employed people and NestEgg.ai urging credit reference agencies to take a holistic view of credit-score-related decisions. Meanwhile, Toucan has updated its features to support customers with mental health issues, and Nuapay is helping to channel donations to the NHS.
Seeing the way, in just a few weeks, the dynamic, vibrant and developing open banking ecosystem has stepped up to make a difference, no matter how small, is why the OBIE pillars of collaboration and innovation are integral to the financial revolution we are driving. Reaching one million consumers was just the first milestone of many to come, our goal is to ensure that a substantial proportion of people and businesses use a range of open banking-enabled services on a regular basis.
