Report

Guide to open banking and smart data in the telecoms sector

12 December 2024

Working from home and the growth in home entertainment means that mobile phone and broadband services are now considered by many people to be an essential household utility alongside water, gas, and electricity.

In 2025, around 65 million people in the UK will be smartphone users, while the UK is home to around 28.1 million fixed broadband lines, generating £14 billion worth of revenue.

However, while many consumers and business owners are keeping a close watch on the cost of mobile and broadband services, ‘switching inertia’ – and the complexity and perceived hassle of changing provider – often keeps them locked into pricey contracts.

Our guide explains how open banking and smart data can revolutionise how telecoms services are consumed, managed, and paid for, giving people greater control over their spending and choice of provider.

It also reveals how some telecoms companies are using open banking to streamline billing and collection, and to help financially vulnerable consumers access affordable plans. You can read the guide here.

Read the guide

Telecoms guide

The role of smart data

The Government’s Data (Use and Access) Bill aims to expand open banking’s data-sharing principles – where consumers consent to share their financial data with trusted third parties to access personalised products and services – to improve competition and choice in sectors such as energy, finance, and telecoms.

It also aims to make it easier for consumers and SMEs to switch providers and tackle the loyalty penalty – the difference between what loyal and new consumers pay for the same service, which costs households around £1,114 a year on their mobile and broadband bills, and mortgages.

Open banking apps can help find better mobile and broadband deals

Open banking-powered money management apps such as Snoop, Emma, and Little Birdie already offer consumers the opportunity to keep track of their bills, flag contract renewal dates, and compare pricing on mobile and broadband services. In some cases, consumers can even switch providers within the app.

“The Bill Timeline in the Snoop app allows users to see upcoming bills and their balances to help them stay on top of their finances. In the ‘switching’ section of the app, users can easily check for current deals on their existing bills and explore other offers. Typical cost savings for broadband services are £200 and around £80 or more for mobile contracts.”

Scott Mowbray, Head of Group External Communications at Snoop

Affordable tariffs

Open banking data can also help people on lower incomes and government benefits access low-cost mobile services. Vodafone’s ‘VOXI For Now’, for example, uses Moneyhub’s open banking-powered eligibility checker to make a quick assessment of customers’ finances and speed up access to the affordable tariff.

Benefits of open banking for mobile and broadband providers

Open banking can also help telecoms providers deliver financial and administrative efficiencies, and in some instances, improve the customer experience.

Offering open banking as a payment option enables providers to streamline some of the administrative burden associated with traditional billing systems, speeding up collections, and helping to minimise the risk of delays.

For example, Virgin 02 Media was the first UK telco to automate the Direct Debit experience through open banking, streamlining the entry of Direct Debit details. Courtesy of a third party fintech platform, customers can auto populate forms via their mobile banking app, without having to key in account details or remember store codes.

While analysing customers financial health in near real-time gives an accurate snapshot of customers’ finances, and enables mobile and broadband providers to effectively assess the risk of offering credit or extended payment plans, reducing the likelihood of bad debt.

Looking to the future

These are just some of the ways that open banking and smart data can revolutionise the telecoms industry. For broadband and mobile providers, it clears a path to cost reductions through automated billing, and improved customer retention.  It can even support fraud prevention, through initiatives such as the ‘Scam Signal’ API which analyses near real-time network data to identify and tackle fraudulent bank transfers.

Meanwhile, consumers and small businesses stand to benefit from more flexible, transparent, and personalised broadband and mobile services, simpler switching and access to more cost-effective tariffs.

Virgin O2 has spoken about the importance of this and the ability of alternative payment methods such as open banking to recover something rather than nothing.

David Cox, Payments Strategy Lead at Virgin Media O2, shared some envisaged open banking end uses, such as cheaper bill payment mechanisms via commercial non-sweeping VRPs; offering services to overseas students without a credit history; or getting some overdue debt money back, rather than nothing.

Read the guide