Ask The Expert – Open Banking

Open Banking is a hot topic right now. The headlines speak of a ‘revolution within the financial services sector’ which offers endless ‘benefits for the consumer’. At face-value Open Banking means consolidating all of our financial assets in one place, but APIs and the complete control over your own data means the implications go a lot further beyond the banking sector. Consumers will be able to use financial services and third party apps to get absolute clarity over their finances. They’ll be able to get insightful spending and income analyses, see updates on their investments in the same place as their credit card transactions, and get quick and easy advice along the way, without excessive form filling or data gathering.

Not only are the financial services getting in on the Open Banking revolution, but the retail, marketing, insight, digital and tech sectors are also starting to reap the benefits that this change in the banking sector offers. While the banks are upping their game to keep up with new entrants in the market, there is great potential for new apps, businesses and services that could use this new source of customer data. The possibilities are quite literally, endless.

We asked Dave Tonge, CTO of Moneyhub, about his take on how organisations can make the most of the changes Open Banking brings.

Here’s our chat with Dave Tonge as part of our ‘Ask The Expert’ series:

ADLIB : Open Banking – it’s a huge topic with implications across a range of sectors and departments. It’s tricky to get your head around all the potential it could hold for individuals and businesses. Can you share your take on ‘the need for Open Banking’ as well as the opportunities for individuals and businesses you see?

Dave Tonge: The simple answer is that Open Banking means that consumers get control over their data again, and they can share their data with whoever and however long they like. This means consumers can take advantage of a wide variety of businesses that can offer bespoke services and products on absolutely anything. For example, insurance providers can see how much you’re spending on insurance and can automatically offer your tailored insurance for a cheaper price. Similarly, a retailer might see how much you’re spending in store, and can offer you vouchers, loyalty points and so on, without the need to carry around cards to scan at the till; it’s all automatic and easy. Companies will gain customer loyalty while being able to offer specialised services and products quickly and easily. In addition to this businesses could get incredible amounts of insight into their customers financial habits, and that knowledge is invaluable.

ADLIB : Looks like there is a lot of opportunity, but on a more serious note, do you think this could expose too much, opening up opportunities for fraud?

Dave Tonge: Of course there’s always a worry when the way we bank changes that it could be dangerous, however a consumer can only opt-in to using Open Banking, you’ll never be forced into using it or sharing your data. You can only share your data with FCA regulated third parties and your banks are still responsible for any fraudulent activity, no matter what. If anything, this makes the whole process a lot safer as a consumer won’t have to give out their passwords or login details to take advantage of financial services anymore. You can turn off data-sharing at any point and only share your data with companies you want to use. Moreover, using third-party apps and other financial services means it’s so much easier to spot fraudulent activity, and they can even spot it for you and let you know automatically if anything seems a bit off with your finances.

Thank you Dave for sharing your take!

If you’d like to find out more about Open Banking, our friends at Moneyhub (joined by other industry experts) are inviting to celebrate and debate the first month of Open Banking in action. Tuesday, February 13th 2018, 5.00pm – 8.00pm at the Moneyhub office (10 Temple Back, Bristol, BS1 6FL). You can get your free tickets via Eventbrite.