Insight Type: Article

Open banking has helped to deliver cost savings and operational efficiencies across many public sector organisations – and there are more opportunities to come. Richard Newman, OBL Corporate Affairs Director, sets out some of the benefits in this article for Government Business. These include:

Tax collection

The UK is a world leader in open banking, and His Majesty’s Revenue and Customs (HMRC) was the world’s first tax authority to offer open banking as a way to pay tax. HMRC launched the service back in 2021, in conjunction with fintech firm Ecospend-Trustly.  

It’s now possible to pay more than 40 different types of tax and duty via open banking, including PAYE, corporation tax, and VAT, and it’s now the third most popular way for individuals and businesses to pay their taxes, after bank transfers and Direct Debit.

Cutting the cost of receiving rental payments

Open banking has a part to play in supporting rent collection for local authorities, housing associations and educational institutions. Offering open banking as a payment option enables cost savings on card processing fees, as well as reduced operational expenditure and time spent on administration.

Procurement via the Crown Commercial Service

A new service, launched by the Crown Commercial Service (CCS), the department that supports the public sector in delivering commercial value when procuring common goods and services, offers further opportunities for cost savings.

Its Open Banking Dynamic Purchasing System (DPS) operates as a ‘vehicle’ for central government and the public sector to source open banking services, helping to reduce the cost of receiving money into public sector organisations.

By reducing the fees incurred by traditional debit card payments, it’s estimated that the DPS could help achieve savings of 70-80%. The services will also help reduce the volume of fraudulent or in-error payments made throughout the public sector.

At the time of writing, the first five firms listed on the DPS were Ecospend-Trustly, GoCardless, MoneyHub, NatWest Bank, OneID, and Ordo (the Smarter Request Company). Just six months on from its launch, there are now more than 20 companies listed on the appointed suppliers register for the system.

Speeding up debt advice

Local authorities often work closely with debt charities to refer residents for support and advice in managing their finances. Using open banking data connections to assess an individual’s finances can give debt advisers an up-to-date picture of a client’s finances and help with signposting them to relevant professional advisory services.

Citizen’s Advice Stevenage pilot project with PayPoint lets debt advisers access a consolidated view of client funds that enables debt advisers to quickly access a consolidated view of their incoming and outgoing funds within minutes and provide actionable advice.

Read the full article in Government Business

At the beginning of London Fintech Week in April, City Minister Andrew Griffith made a bold statement, declaring that “this will be the year for delivering the next generation of open banking”. As Chair and Trustee of Open Banking Limited (OBL), I couldn’t agree more. Open banking has already transformed the financial landscape, and we are now on the brink of something even bigger: ‘open everything’. 

The potential of ‘open everything’ is incredibly exciting, with planned legislation to enable data sharing across all industries – from finance to utilities – to create a truly connected economy. But before we can achieve this, we need to continue driving open banking forward and deliver further benefits for consumers and businesses up and down the country.  

I was thrilled to attend the Open Banking Summit in Manchester recently, hosted by FinTech North and Open Banking Excellence. With over 90 delegates from across the Northern fintech community attending, it was fantastic to see how open banking has become a catalyst for innovation and growth in all regions across the UK. This includes Manchester, a city that has been a real powerhouse for fintech innovation and which is now fully embracing open banking as a driving force for economic growth and prosperity. 

Open banking has been a game-changer for consumers and small businesses, thanks to the collaborative approach taken by regulators and industry players in the UK. But it’s not just about innovation and collaboration – our regulatory framework has also played a critical role in fostering competition and driving consumer benefits. 

The Competition and Markets Authority (CMA) played a pivotal role in mandating participation in open banking and setting a standard for performance. This pro-competition intervention ensured that we went faster and achieved more than our European counterparts. This helped to create an environment where fintechs and traditional financial institutions can compete on a level playing field, driving innovation and improving services for consumers and SMEs. 

Research in our latest Impact Report shows that the number of open banking providers has increased across the UK, with 169 regulated providers and 204 third-party providers as of March 2023.

To date, there are over 1,400 fintechs operating outside of London, demonstrating the reach and success of the UK’s thriving fintech sector. The North-West and Scotland are home to the largest number of open banking providers, with 24 and 23 providers, respectively, as well as thriving fintech hubs. 

The North-West has also seen the largest increase in open banking adoption, with a 280% increase in API calls between Q4 2021 and Q4 2022. And it’s not just Manchester – Liverpool, Leeds, Edinburgh, Birmingham and many other places are also seeing a boom in fintech activity, with a rising number of companies setting up shop in those cities.

Our report highlights case studies of open banking use across the UK, including a social housing provider in the North-East using open banking to improve rent collection, and a small business in the South-West using open banking to streamline accounting and invoicing.  

While the technology has played a significant role in fostering innovation and growth in regions outside of London, we cannot stop here. These hubs are not just important for their local economies, but for the UK as a whole. We must continue to push the boundaries and use open banking as a tool to level up the regions and improve financial inclusion across the UK. This means ensuring that all areas of the country have access to the latest fintech innovations and that everyone can benefit from the advantages that open banking brings. 

The COVID-19 pandemic highlighted the need for financial services to be more accessible, and open banking has provided a key solution, allowing for the development of digital financial services that can reach more people in need, regardless of location or financial background. 

To achieve our goal of ‘open everything’, we must continue to work collaboratively as an industry and with the regulators to create an environment that encourages innovation and competition. We must also continue to invest in education and training, ensuring that people have the necessary skills to take advantage of the opportunities offered by open banking. 

I am proud to be part of the open banking revolution and to see how it has positively impacted financial services in the UK. Open banking has the power to level up the regions and improve financial inclusion across the country, and I am committed to ensuring that we continue to support this. 

With record rises in the cost of living, and many of the UK’s households and businesses facing rapidly rising bills, it’s more important than ever for consumers to understand and manage their money in the most cost-effective way.

A recent report from open banking platform Yapily revealed that around 95 per cent of consumers are concerned about increases in the cost of living. In addition, Bank of England figures for January 2023 show that consumers borrowed an additional £1.6 billion in consumer credit (net), compared with £0.8 billion borrowed in December 2022. This was split between £1.1 billion of borrowing on credit cards and £0.5 billion of borrowing through other forms of consumer credit, such as car finance and personal loans.

Yapily’s research also reveals that 88 per cent of consumers have looked to financial products and services in the past year to help them manage their finances more effectively.

We highlight some of the most common financial challenges and explain how open banking-enabled tools and services can offer simple and practical ways for consumers to take greater control of their finances.

By consenting to share their banking data, consumers can:
• Use personal finance apps and account dashboards that give them a clear view of all their incomings and outgoings to help them better understand their finances.
• Identify ways to budget better and shop around for money-saving deals.
• Help build a regular savings habit – however small – with round-up apps that tuck away spare change, or which move surplus funds to interest-bearing accounts.
• Access affordable credit, particularly if they don’t meet traditional lending criteria.
• See if they are eligible to switch to an affordable energy or broadband tariff.
• Use budgeting tools to help navigate their way out of problem debt or to access professional debt services faster.

These tools can boost individuals’ confidence in their ability to manage money, and, in turn, build financial resilience and improve financial wellbeing.

Read our article on how open banking can help tackle cost of living challenges, and watch our short videos to see how it works in practice.

It’s been exciting to see the increasing speed of open banking adoption in the past six months. Today I’m pleased to share several key successes. 

First, the open banking community made a record 1 billion API calls during May 2022.  

This metric is a key barometer for the level of activity that the open banking industry generates each month. From information calls to payment calls – hitting the 1 billion mark shows the huge rise in activity since the first release of the API specifications in July 2017. 

Secondly, businesses and consumers made 5 million open banking-driven payments throughout May 2022.  It is clear that end-users are choosing to ‘pay by bank’ and take advantage of all the benefits that come with using this fast, frictionless, and secure way to pay.   

With a record 1 billion API calls, 5 million open banking payments, and 6 million active users, it’s clear that open banking is continuing to deliver added value to the UK’s consumers and small businesses.

Six million users and counting 

Finally, it’s taken just under three months for us to reach another milestone – we can now count 6 million active users of open banking in the UK. 

Once again this demonstrates that consumers and small businesses are reaping the rewards of using open banking to keep on top of expenditure and daily budgeting, cut card-processing costs, and shop around for better financial products and services.  

David Beardmore Ecosystem Development Director, OBIE

We’ve already found that 64% of consumers have claimed that using open banking savings apps increased their total level of savings and helped them develop a regular savings habit, while using money management apps improved their understanding of their finances, helping them to feel more in control of their finances. 

And our third Open Banking Impact Report, published later this month, contains unique new research which highlights how open banking-driven cloud accounting services are helping small businesses make better financial decisions, become more efficient, and collaborate more effectively with their accountants.   

It’s clear that open banking is continuing to deliver added value to consumers and small businesses in the UK, and our first-class open banking standard and ecosystem continue to lead the way in the uptake of this pioneering technology. 

In 2021 we witnessed significant growth in the adoption of open banking. We saw more participants, more end users, and certainly lots more publicity about the benefits it can bring.

But what will 2022 bring? We asked a few experts from across the open banking ecosystem to give us their predictions for what we believe will be another important year.

We share their thoughts below.

What will take open banking to its full potential in 2022?


HMRC team

“Effective collaboration to turn open banking data into services that are good to use and offer real value to customers and businesses. HMRC wants to be a big part of that, and we will be inviting interest in a number of open banking-related proofs of concept, such as splitting VAT at source.

Following the success of implementing payment initiation services, HMRC is also looking to maximise the benefits of open banking by exploring the application of account information services. We are keen to continue engagement with the OBIE, Pay.UK and the Bank of England to explore how we can further align our strategic activities.”

Oliver Shaw-Latimer, Head of Global Fintech, JustGiving

“From our perspective, it’s VRPs. It’s huge for us. Replacing Direct Debits eventually would be awesome, because it’s all tech and it’s more flexible – it’s instant payments. And recurrence is huge for the charity sector.

The other one is request-to-pay, which is sending out pre-invoiced requests for payments to our suppliers.

A lot of corporates hand over funds so we can disburse them to a wider network of charities. The ability to send them that ask, and have them respond to that ask via the open banking network kind of closes the loop, without having human steps in the processes. That’s a big one for us as well.”

Francis McGee – Consumer Representative, OBIE

“2022 will be a transitional year. The implementation phase will end, and we need new structures that make sure open banking continues to be done well for consumers, and run well for the ecosystem.  Let’s start 2022 by signing up to five principles to make that happen:

Fliss Berridge, Director and Co-Founder, Ordo

“Open banking has made life easier for businesses and consumers making and collecting single payments. The gap that’s left is to cover VRPs – regular repeated payments like monthly utility bills, and ad hoc repeated payments to the same retailer (in-person or online).

Open banking makes these payments much smarter, more convenient and efficient – a ‘smart Direct Debit’ if you like. VRPs can be set up in minutes rather than weeks, payment mandate parameters can be changed dynamically, right up to the point of irrevocable payment, meaning businesses and consumers can respond to life events in real time. Payment transfers are in real time, without long processes and paperwork.

Once open banking is used for our regular bills, we’ll wonder how we ever got by waiting.“

Hetal Popat, Open Banking Director, HSBC Group

“During 2022 I expect we will see extensions from open banking to wider passporting of data from and between financial institutions. This will unlock enormous value for both consumers and businesses, and will be a pro-competitive force in many other industries outside of financial services.

In parallel, the launch of VRPs will enable entirely new use cases to be fulfilled, embedding payments into wider customer journeys. The industry needs to co-ordinate in order to bring this to market, and the OBIE is well placed to facilitate this.”

Billy Helm, Marketing Executive, Ecospend

“2022 will be about consolidation and sustaining growth. Ecospend’s partnership with HMRC proves that, where there is consumer demand and an intuitive flow, the technology works well at scale. 

For open banking to reach its potential, consumer education will be vital. Also, we need to be realistic that this will not apply, in the short term at least, across every payment setting but will always be part of a mix.

It’s perfect when the consumer has to pay a bill or when fast delivery of a product isn’t a prerequisite. Aligning with the banks will be crucial to broaden the opportunities, especially to ensure industry-wide consistency around the settlement status of payments.”

Paul Lloyd, Co-founder and CMO, Snoop

“We need a broad set of scalable propositions that make people’s lives easier. HMRC’s adoption of open banking is a good example. PensionBee and Plaid partnering to turn a two-week pension contribution process into something instantaneous, while helping people save more easily for retirement is another.

And the work Snoop is doing to help make people better off is another example. With Snoop, every customer gets a unique money management experience based on their open banking data. Hyper-personalisation and the ability to connect people with relevant and personalised money insights at exactly the right time enables the app to be relevant, practical and useful in people’s everyday lives. We’re beginning to see just what a profound impact it can have.

The implementation of VRP will be another huge moment for open banking in the UK. This, combined with the scrapping of 90-day reauthentication, will play a significant part in unlocking open banking’s potential.”

Mark Chidley, Independent SME Representative, OBIE

“As the implementation phase of open banking concludes it is essential that the CMA and its fellow regulators (the Financial Conduct Authority, the Payment Systems Regulator and the Information Commissioner’s Office in particular), orchestrated by government, ensure that:

“We have been encouraged by the CMA’s 5 November open banking update to believe there is every chance that these important outcomes are delivered in the broad interests of the people and small businesses that open banking was always intended to benefit.

“We eagerly await the CMA’s consultation response and wider regulators’ statement in the early part of the new year.”

Nick Levine – Chartered Accountant and Fintech Consultant

“VRPs will play a key role. The benefits of smart overdrafts and intelligent savings are highly compelling and made possible with the introduction of sweeping via VRPs. I expect many people to engage with open banking for the first time through these tools and for trust and confidence to continue to increase.”

 

Variable Recurring Payments (or VRPs for short) are a hot topic. They are a form of payment instruction that can be set up and used to make a series of future payments.

At the moment it’s not uncommon to hear VRPs referred to in the same breath as a process known as ‘sweeping’, but VRPs will be used well beyond sweeping as well.

Granted, if you operate outside of the financial services marketplace, the chances are you probably haven’t heard of VRPs or sweeping. However, they are at the heart of a new form of open banking-enabled technology that is set to make life a whole lot easier for small to medium-sized enterprises (SMEs).

SME Think Tank views

In a recent OBIE Think Tank we brought together representatives from across the business landscape to explain how VRPs work, both in the context of sweeping and other propositions that can provide big benefits, and potentially impact, the SME community.

What is a VRP?

A VRP will allow customers to safely connect authorised payments service providers (PISPs) to their bank account. Providers can then make a series of payments on a customer’s behalf within agreed parameters, offering more control and transparency than existing alternatives.

For many consumers and small businesses, the most well-known method of collection for a recurring payment is via Direct Debit or continuous payment authority (CPA) – a type of recurring payment that a merchant makes using their debit or credit card details.

Unlike these two well-known methods of payments, a VRP works by letting customers safely connect authorised PISPs to their bank account so they can make payments on their behalf.

VRPs offer a range of benefits over Direct Direct and card CPA to both the small business making payments and the small business receiving payments, as the table below sets out.

At a glance: Recurring payments

 Direct DebitCPAVRP
TransparencyYou have visibility of the mandate and the last amount taken.You can’t see details, only the transactions that appear on your statement.  Mandate and payment parameters are visible in your banking app.  The payment parameters limit the amount that can be taken and also allow an end date for the mandate to be set.
SecurityInvolves sharing a sort code and account number in an uncontrolled environment.Involves sharing all card details on a debit or credit card.Must set up via a secure consent journey. It has to be online and through your bank.
FlexibilityTakes place on the same day (or nearest working day) every month and if the timing or amount changes, the payee has to be notified in writing (unless waived in terms and conditions).A company is given permission to take funds from your debit or credit card on a flexible basis. A set of parameters is agreed and a flexible payment can be made within those agreed boundaries.  

Why should you care about sweeping?

Sweeping is a particular proposition which can be developed using a VRP to automatically move (or sweep) money from one of their accounts to another of their accounts.

There are many examples of where this could be used, such as sweeping funds from a current account to a savings account, or a current account to a loan account.

And of particular interest to our Think Tank was an industry consultation where the Competition and Markets Authority (CMA) mandated the leading nine retail banks to make VRP functionality available, for free, to any PISP as long as the payment is specifically for the purposes of sweeping.

This means that PISPs can develop solutions for customers to help them run their finances run more effectively, and ultimately make their money work harder.

For example, money can be automatically transferred between accounts, such as moving excess funds into an account where it can generate interest. Alternatively, it could be used to transfer money to repay an overdraft or loan account.

However, we know that the industry is busy developing VRPs for other propositions as well.

At a glance: VRPs for sweeping versus VRPs for other use cases

VRPs for sweepingVRPs for other use cases
All CMA9 banks must offerOptional for all banks
Free to usePotentially charged
Free to accessRequires a contract
Launch due summer 2022At the discretion of individual banks

The real-world business benefits of VRPs for sweeping
By coupling VRPs with sweeping, the OBIE has identified potential benefits relevant for both consumers and SMEs. These include:

Building up savings

Currently there is £100 billion pounds tied up in the UK’s business current accounts earning little interest. However, though many businesses are cash-rich, many don’t have the time or inclination to do anything with their savings.

An instruction could be set up with a savings company to monitor a business current account. Every time the balance goes over a certain amount, that money could be swept into a business savings account. Every time a balance drops below a certain amount, money could be swept back (though there is acknowledgment that current low interest rates make this of limited value).

Preventing overdrafts

There is potential for sweeping to create a form of unbundled overdrafts to bring more competition to the business current account market.

The real-world business benefits of VRPs

While there are pockets of opportunity for VRPs and sweeping for SMEs, our panel saw the real prize in non-sweeping use cases. This could be as a replacement mechanic for existing payment methods that carry particularly high cost, or as a route for better, more timely payments. These include:

Cost savings on international payments

According to a report in 2016, approximately £4bn of excess profit was generated by banks where small businesses default to make international payments. That number is only set to increase. VRPs for sweeping could be used to take the friction out of using an alternative payment company or FX business.

Tax efficiencies

As HMRC embraces open banking-enabled technology, we know the revenue is looking for more real-time options to support prompt and secure payments. Not all SMEs manage tax well – but what if tax could be siphoned off for payment at the point of invoice collection?

Tackling late payments.

With late payments the thorn in the side of many SMEs, our panel were more animated when discussing the wider use of VRPs to help them get paid, whether in a real-time retail environment, or in supporting instant payments.

New options in the subscription economy

The subscription economy continues to expand, with many SMEs participating. VRPs offer a method of payment which could combine the low cost of Direct Debit, with the speed and flexibility of cards, which could be a powerful alternative for this growing market.

So what’s the verdict?

Our discussion clearly demonstrated the appetite from the market to use VRP technology and take advantage of this capability.

Helping mitigate late payments were deemed the real prize, but our panel also welcomed removing some age-old headaches, such as the indemnity claims associated with Direct Debit.

The final thought was that the innovations discussed would be helpful if they provide a benefit that is easily articulated and saves time. The key to adoption will be in ensuring time and cost barriers are overcome to ensure SMEs get to the start line.


Notes

Report based on discussions at the OBIE SME Think Tank which took place on 23rd September 2021.

The Open Banking Implementation Entity (OBIE) has published the Open Banking Impact Report (October 2021) assessing the extent to which open banking is helping consumers and SMEs.

It paints a positive picture. Our new research found that there are a growing number of services in the market, and these are increasingly being adopted by customers.

This is an exciting and unique piece of new research. It is the first cross-market quantitative research undertaken which seeks to understand verified customer attitudes to open banking-enabled services. 

Most users say that open banking apps are helping to resolve their biggest financial challenges – keep to budgets, reduce unnecessary expenditure, and shop around for deals

Who is using apps?

The research objectives were to establish the profile of customers using open banking-enabled money management and micro savings apps, to understand their reaction to using these apps and whether they were benefiting from using them. Our report forms part of our commitment to present a full picture on the development of open banking, and evaluating the benefit it is providing to end-users.

Apps are easy to set up

The results are clear, demonstrating that an overwhelming majority of users have a positive attitude towards using these apps. Ninety per cent of consumers find these banking apps easy to set up and over three-quarters (76%) of customers say that they will, or are likely to, continue using them.

Richard Koch, Senior Policy and Public Affairs Specialist, OBIE

But the most important question is whether these services are actually helping consumers to be more engaged with their finances, make better decisions, save more, or get better deals?

The results are extremely encouraging. Most customers using open banking products (76%) acknowledged that these services have helped them save more and build a financial cushion. Those customers using PFM apps told us that they were:

  • helping them to keep on top of expenditure (75%)
  • reduce unnecessary expenditure (62%)
  • keep to a budget (64%)
  • shop around more (59%)
  • reduce fees and costs (55%).

Creating a financial buffer

Savings app users clearly believe the apps are helping them to save. For more than one in five, this was their first savings account, and overall, nearly two-thirds had seen their savings go up since they started to use their app. Three-quarters agreed that they now found it easier to regularly save money left over each month, with 71% now feeling more confident that they have a financial cushion or buffer to meet unexpected spending.

This tangibly demonstrates the progress that open banking is making in helping to address one of the biggest financial challenges that UK consumers are facing, post-pandemic. One fifth of the UK population has less than £100 in savings, and one in 10 have no savings at all. 

For the first time we can profile the early adopters of two core open banking-enabled propositions. Twenty-seven per cent rate themselves as low on financial confidence and many of those adopting these services faced significant levels of worry about aspects of their finances:

  • 43% worry they don’t have enough savings
  • 31% worry about their level of debt
  • and 18% struggle with their monthly bills.

These are exactly the consumers who can benefit most from support to achieve better financial outcomes. 

Continued – and extended – use

Alongside findings from consumers that they are happy using open banking apps, is their view that these services will continue to serve them well into the future. Indeed, so much so that 84% of respondents said they would be interested in expanding their use of open banking services. Only 8% indicated that they would not.

Addressing financial needs

The results demonstrate that, in the eyes of consumers accessing them, new open banking services are genuinely helping to address their key financial needs. We see positive, committed customers, really benefiting from using these services and a growing number of apps.  An additional 13 open banking-enabled products and services have come to market in the first six months of the year.

We also see rapid growth in the number of active users of open banking services – penetration among digitally-engaged customers has been steadily increasing: from 2.5% in January 2020 to 5 – 6% earlier this year, and now around 8%.

As the pool of consumers and providers grows, open banking will increasingly empower customers, taking the stress out of finance and helping to cut the complexity of financial decision-making in a way that puts them firmly in control of their financial lives.

You can read the full report here.

What consumers say

As part of our research, we also asked independent research agency, Marketing Means, to interview a small number of UK consumers, from a range of age groups and income brackets, who shared their experience of using some of the market-leading open banking apps. You can read the full report here and insights from the report below. 

Notes:

The report is built using a methodology developed by the Personal Finance Research Centre at the University of Bristol. We produce a new report every six months.

The insights are based on several data sources and research studies which we detail in the methodology sections.

As part of our research, we also asked independent research agency, Marketing Means, to interview a small number of UK consumers, from a range of age groups and income brackets, who shared their experience of using some of the market-leading open banking apps. You can read the full report here and insights from the report here. 

It was wonderful to see so many members of the open banking community at the recent Open Banking Expo and at our own ecosystem events. It reinforced how much we have all missed meeting in person and, even in the two short years since the pandemic, how much progress open banking products and services have made.  

We look forward to continuing this collaborative journey to help open banking reach its true potential.

From our own point of view at the Open Banking Implementation Entity (OBIE), we are pleased to say that in those past two years, we have: 

  • delivered most of the agreed revised roadmap 
  • seen the launch of successful account-to-account (A2A) payments 
  • witnessed the rise of the QR code, particularly for charity payments, including the legendary Captain Tom campaign 
  • delivered the standards for Variable Recurring Payments (VRPs) for sweeping  
  • and seen HM Revenue & Customs (HMRC) take £1.5bn in tax payments via open banking. 

And some of these milestones turned out to be hot topics for discussions at Expo. 

David Beardmore Ecosystem Development Director, OBIE

Unleashing the potential of VRPs  

On the main stage, my colleague Alan Ainsworth, Head of Policy at the OBIE, chaired a session on VRPs.  

Niamh Greally, VP Product at Chip, explained how the savings app helped users save more easily, cut the cost of debt, and make money work harder, and that VRPs would make it easier to sweep spare money into interest-earning accounts.  

Fliss Berridge, Director and Co-Founder at payments platform Ordo, highlighted further opportunities for VRPs to play a part in smooth point-of-sale payments and invoicing, as well as the potential for managing irregular – as well as – repeated payments. 

Matt Parish, Product Lead, VRP, at API developer TrueLayer, which provides the platform for Chip, spoke about how 2022 will be the year of VRPs and that he hoped to see some APIs go live in January. 

The panel agreed that there were opportunities to challenge Apple Pay and Google Pay and that VRPs will be a game-changer for consumers and SMEs alike. 

Consumer attitudes to apps 

The OBIE launched its second Open Banking Impact Report which assesses the adoption of open banking services in the UK. It paints a positive picture, showing that customers who are using open banking-powered apps want to continue using them – particularly apps that help tackle financial challenges such as sticking to budgets, reducing unnecessary expenditure, shopping around for deals, and minimising bank fees and charges. 

The challenge, as always, is to build sufficiently compelling propositions to persuade both consumers and businesses to feel confident in sharing their data.  

HMRC – the ultimate use case 

At my own session, a fireside chat with James Hickman, Chief Commercial Officer of Ecospend, we discussed how the UK government became a global leader in open banking by using the technology to collect nine different kinds of tax, ranging from corporation tax to PAYE to VAT. Kevin Guest and Kseniya Shuturminska from HMRC were on hand to share that there are plans to extend that to a total of 30 different products next year.  

The HMRC team also revealed that it is helping other government agencies explore how they can use open banking to collect payments. And just in case you thought it was all about taking money from citizens, the team is also looking at delivering outbound payments to support vulnerable customers.  

Finishing up, our new Chair and Trustee, Charlotte Crosswell, delivered the closing keynote, sounding another note of optimism, in particular about payments.  

She said: “HMT and the Payments Systems Regulator have also indicated their support for the development of open banking payments.  How can we unleash the potential for customers and businesses to pay and get paid by open banking payments? There are a lot of unknowns, but I do know that we as an industry can solve this.” 

Our thanks go to Adam Cox and his team at Open Banking Expo for getting us all together in an engaging, safe and enjoyable way.  

What is clear to me, is that two years without meeting is too long. We look forward to getting together soon to continue this collaborative journey to help open banking reach its true potential. We will be hosting more in-person events in the coming months to facilitate knowledge-sharing, networking and the continued growth of this exciting ecosystem we are privileged to lead.  

Watch this space for details of upcoming events! 

The OBIE is a unique repository of insight, expertise, and experience gained from having brought the open banking programme to life in the UK. We are pleased to make this thought leadership available to the broader open banking ecosystem, as part of a new, regular, ‘The OBIE Op-Ed’ series.

Contact press@openbanking.org.uk to request coverage of a specific topic.

The Open Banking Implementation Entity (OBIE) is an organisation that was established as a competition remedy, and its  commitment to accessibility and inclusion goes far beyond the industry it was mandated to disrupt. Part of its mission to be a public good extends to having an engaged, diverse and inclusive workforce. Such measures have led to the OBIE making flexible working opportunities available to staff, such as splitting full-time roles into part-time roles via role sharing.

More recently, this has led the OBIE to be one of the first organisations to sign up for the Accutrainee Scholarship Programme. Legal trainee Chidi Onye Ogbuagu, who has been with the OBIE since March 2021, speaks about his experience of the Accutrainee Scholarship Programme, his role in the OBIE team and his ambitions for the future.

Chidi Onye Ogbuagu, Legal trainee

As I neared the completion of my studies, I shared the anxiety of my peers as we hurdled obstacles towards securing a Legal Training Contract. It’s a competitive landscape and we don’t all necessarily begin at the same starting line. I was in between legal jobs during the pandemic, and I came across the Accutrainee Scholarship Programme. Encouraged and excited by its affirmative action approach and its mission to create opportunities for talented graduates irrespective of background, I decided to throw my hat in the meritocratic ring.

After undergoing a rigorous selection process, I was made a Scholar and awarded a placement within the OBIE’s in-house legal department. Having carefully observed the growing popularity, regulatory scrutiny, and potential of financial technology firms, I was delighted to hear the news. Not only because I would be working in my first-choice sector but also because I would be supporting the government’s own ambitions to promote innovation and financial inclusiveness.

My experience at the OBIE has so far been outstanding. My role has involved lots of new exposure to different policies, regulations, and stakeholders, which has greatly informed my perception of the industry and future career ambitions. In addition, I have gained insights into the fintech world, not just from a legal standpoint but also from a consumer perspective, as I got to observe OBIE’s innovative thinking and the complex work that has a direct and measurable benefit to consumers such as variable recurring payments (VRPs) and Sweeping.

It has also been a different experience joining a new organisation during a global pandemic where the entire office was, and still is, working remotely. Despite me only just starting to meet my colleagues in person, I couldn’t have felt more supported and valued throughout my secondment. I have not only been able to establish myself within OBIE’s Policy, Legal and Communications team in which I sit, I have also expanded my professional network by getting to know the wider OBIE team and be exposed to all of their respective areas of expertise and experience.

I am very grateful for the opportunity that the Accutrainee Programme has given me. Through its mentorship scheme, training sessions, and unparalleled network of trainees and legal professionals, I feel as though I am being expertly shaped for a career as a solicitor.  I am working for OBIE in this placement until March. I would then like to be placed within another company, or law firm committed to positive change to build on my legal and professional experience.

Finally, I am very appreciative of the OBIE. Not just because of how seamless it has felt to work alongside its specialists, but mainly because of its decision to uplift those who want to enter the legal profession and feel they have a lot to offer but who might not have the same chance otherwise.

– – – ENDS – – –

About the Accutrainee Scholarship Programme

If your organisation is interested in supporting the Accutrainee Scholarship Programme please see further information below:

The Accutrainee Scholarship Programme offers a simple solution for legal leaders to make a positive impact in supporting diversity in law through the delivery of high quality junior resources. The Scholarship goes beyond simply offering short term work experience to scholars but rather a genuine root to qualification through training contracts or qualifying work experience opportunities as well as meaningful contributions to their studies and exams.

For more information please contact susan.cooper@accutrainee.com.

The OBIE have worked extensively with Government to support HMRC’s £3 million tender for open banking enabled services. While we had no input into the deliberation process, the contract was subsequently awarded to ecosystem participant Ecospend. OBIE is also supporting HMRC on wider opportunities for using open banking to automate and simplify the calculation and collection of tax, as well as reducing reconciliation risk.

Here, Simon Lyons, Head of Ecosystem Engagement talks to Nick Down, Head of Payments at HMRC: 

  • Simon: Just for the readers, can I ask you first of all what is the scale of the operation you head up? We know that UKPLC aka the UK Government, is the biggest business in the land but many will not quite appreciate the numbers and volume of customers and transactions. Can you give a brief overview?.

Nick: Virtually everyone in the UK is a customer of HMRC – either as a taxpayer, as someone who receives financial support payments, or both. We collected £636.7 billion in tax revenues and paid out around £40 billion in benefits and tax credits in 2019-20. That means payments are a crucially important part of what we do.  We need to provide easy to use, secure payments for customers that are cost effective for the nation’s taxpayers. We are very much focussed on becoming a trusted, modern tax and customs department as outlined in government’s 10-year Tax Administration Strategy. It is a big task, but we are making steady progress and are particularly pleased to have gone live in March this year with what we understand is the first open banking payment service implemented by any government globally.

  • Simon: You went live with open banking payments for Self-assessment on 24 March 2021. That process took around three months to deliver and complete which is quite staggering when we consider the size of HMRC. What were the key benefits that drove the decision to choose an open banking provider?

Nick: We were looking for ways to make it easier for customers to pay which were good value for public money.  Open Banking gives customers the option to have their payment details prepopulated from their bank account, letting them pay more quickly and reducing the risk of them making a mistake.  Open Banking uses Faster Payment, which is a quick and inexpensive payment method.  Implementing the new system so quickly was a great piece of teamwork between the Open Banking supplier and our digital delivery, payments and commercial teams.

  • Simon: What are the internal reactions within HMRC and the wider government ministries to the implementation? Any nuggets you can share?

Nick: There’s been a great deal of interest and universally positive reactions.  Customers like the new service, too – they paid more than £1 million using open banking within two days of go live.

  • Simon: OK you went through a process and engaged with a small fintech (Ecospend) I personally think this was the best part of the process. HMRC led the way by choosing a true fintech. It could have been one of a couple, but choosing a new emerging open banking player was so beneficial to open banking adoption. What problems did this present when we think of your legacy procurement process?

Nick: We didn’t set out to engage with a small fintech. We would always promote adoption of Small and Medium Enterprises where appropriate but this was new technology, and therefore unfamiliar territory in terms of who the best providers were likely to be. Our biggest challenge was building requirements for a brand new solution, unprecedented in government; so, with support from OBIE, we explored the market to understand what good should look like. We brought in expert consultants in financial services to support the procurement and set out qualitative measures to provide a good basis for assessment. Some of the best responses were from the smaller fintechs, who were able to meet all of our requirements better than some of the larger businesses.

  • Simon: You sit in a key strategic position in HMRC, what were the challenges you faced when considering embracing open banking?

There were two main ones.  The first was doing the groundwork to move where we were a few years ago, with payments being designed as part of each tax regime, and therefore inconsistent and somewhat confusing for customers paying several taxes, to where we are now, with a much more consistent approach to paying HMRC that provides a firm foundation for launching new payment services.  The second was mindset: we knew we need to look outwards and worked hard to understand more about the potential of fintechs and make connections with the innovators in payments. You and your OBIE colleagues were a big part of opening our eyes to the new potential being created in the world of payments, and I’m very grateful for the help you gave us.

  • Simon: What has the reaction of your bankers been to the initiative?

Nick: That the new Open Banking payment service as a very good option for our customers

  • Simon: HMRC has a very large procurement function, the biggest in the UK. Many of our OBIE ecosystem members really struggle when engaging with them and big corporates. Learning from what HMRC did what advice would you give/or what would you recommend?

Nick: We have a large overall procurement function, made up of smaller specialist teams, such as the team working in financial services procurement. It is actually quite small, so we’re not as impersonal as some of your members might imagine. And we want to engage with Open Banking Ecosystem members as we know they have the expertise and ideas we are looking for to feed our innovation, as well as the required financial accreditation. We would encourage members to scan public noticeboards for any of our Procurement Information Notices and innovation days that we hold – and respond to them! We also make a point of attending industry forums and award ceremonies so they should look out for us there. We’d love to hear from them.

  • Simon: The benefits of open banking have been recognised by HMRC by the plan to launch Self assessment, PAYE (early May) followed by CT and VAT. Are there any other plans in place that you can share.

Nick: Throughout the coming year, we will be rolling out the Open Banking service to all our other taxes and regimes that can be paid by bank transfer, as well as looking for ways to improve the ‘payment journey’ (horrible term!) to make it as simple and efficient as possible for our customers.

  • Simon: The million dollar question – You are meeting with a large UK plc, they ask “should we use/consider open banking” what would your answer be?

Nick: Take the plunge!  If you have thought about how Open Banking might dovetail with your payment strategy and your customers’ expectations, talk to OBIE about Open Banking.  You won’t regret it.  And if correcting customer payment errors or allocating payments to the right customer account is a significant task for your organisation, you should definitely consider Open Banking which pre-populates payment data with the correct bank account details.

The OBIE is a unique repository of insight, expertise, and experience gained from having brought the open banking programme to life in the UK. We are pleased to make this thought leadership available to the broader open banking ecosystem, as part of a new, regular, ‘The OBIE Op-Ed’ series.

Contact press@openbanking.org.uk to request coverage of a specific topic.

Open banking is at an inflection point, where positive action needs to be taken to maintain momentum and ensure the benefits currently provided to over three million users of open banking services extends to many more millions of people. Here Alan Ainsworth, the Open Banking Implementation Entity’s (OBIE’s) Head of Policy, explains what it will take to ensure that open banking, fintech development and innovation continues to prosper.

“We pioneered Open Banking, which has now taken the world by storm.”

City Minister John Glen MP 

If we look to the very origins of open banking, the objective was to increase competition and choice in financial services, and while many different actors have brought it to life, we cannot ignore the role of regulation in getting it going in the first place.  

In the case of open banking, the progress we have made to date has only been possible because (through a combination of PSD2, GDPR and the CMA Order) the CMA 9  have been mandated to implement the standards and implement them well.  As the Smart Data Report makes clear, “feedback from those involved in open banking is that mandatory participation is a key step, open banking was around for a decade before it picked up pace and the key impetus was legislation requiring banks to participate and fund an implementation body.” 

Fast forward three years, and it’s clear to see how much progress has been made. We have more than 3 million consumers and small businesses who access a wide range of open banking enabled services each month. Our thriving ecosystem of more than 300 regulated Third Party Providers (TPPs), who are collectively bringing innovative new products to market, serves as an exciting example of fintech incubation, development and innovation. Our annual report serves to highlight the journey we have been on to make this happen, and that this progress is by design and not by accident.  But we cannot afford to rest on our laurels. 

The recent publication of the Kalifa Review of UK FinTech, explicitly recognises open banking as a leading UK success story. In his foreword, Economic Secretary John Glen MP stated, “We pioneered Open Banking, which has now taken the world by storm.” This view is also backed by the Financial Conduct Authority (FCA), in its feedback statement on the future of open finance, and by the Department for Business, Energy and Industrial Strategy, as part of its Smart Data report.  

Yet for all these plaudits we stand at a critical juncture, as decisions have yet to be taken about how open banking will be managed, monitored and supervised. Out of the many proposals that have been put forward, it is positive to see overwhelming support to put whatever entity we evolve into on a more permanent footing. However, there are some real gaps in what has been proposed thus far, that if not addressed will have worrying and far-reaching consequences. 

On March 5, the CMA launched a consultation on the future governance of open banking. In his consultation submission, the OBIE Trustee Imran Gulamhuseinwala outlined a proposed model for the future governance of open banking that satisfies the CMA’s four specified priorities, that the new service model is independently led and accountable, adequately resourced to perform the functions required, dedicated to serving the interests of consumers and SMEs and sustainable and adaptable to the future needs of the ecosystem. The CMA is soon to publish all of the consultation responses, while a formal decision is expected in early June 2021. 

While everyone involved in the evolution of open banking will all be invested in seeing this become a great success story, one that we can look back on in a decade with pride we know that although we have much to be proud of, we are still pretty early in our journey.  

Firstly, as we know open banking didn’t happen overnight – in the years since PSD2 made open banking a regulatory requirement, the OBIE has been hard at work getting the right foundation ready. Yet there seems to be a wrong assumption that in terms of the implementation we are largely finished and are ready to evolve to a new phase. This is simply not correct. More work needs to be done – not only to get the roadmap complete and successfully implemented but to finish implementing the dashboards and to finish our work on making it easier for people to sweep money between their accounts. Even if we only looked at completing the roadmap as we are today, this would still take us well in 2022.  

Secondly, for open banking to solve the very problems that mandated its existence, we must ensure the continued quality of implementation and that the CMA9 continue to deliver on their obligations. We cannot ignore that this is a competition remedy and needs to be managed as such. The OBIE Trustee is proposing that the role is split into two, with the continuation of a Trustee, in addition to the Chair of the new entity. This would give an individual the teeth to ensure that the CMA9 continues to deliver high quality API’s that allow the TPP’s to develop products and that we address customer experience issues. Given that two out of every three customer journeys fail we are simply not there yet.   

Thirdly, when we look at ecosystem stewardship, there are a number of gaps. The CMA wants to see a vibrant, healthy competitive market that ensures positive consumer outcomes. Our statistics evidence that we are delivering improvements for more than 3 million customers and growing. We only have to look at the fact that we have more TPP’s in our ecosystem than the rest of Europe combined to see what can be achieved when ecosystem stewardship provides incubation, an environment to test products and to iron out issues. For that to continue, proportionate and logical funding provisions need to be established. The CMA9 should not have to pay the lion share – the Trustee has put forward a funding model that levels the playing field based on an FCA style levy, which means a contribution based on size, and doesn’t price out and therefore stifle innovation of smaller start-ups.  

Lastly, given all of the work and investment that it has taken to get open banking to where it is now, it would certainly be a missed opportunity if all of the learning and development is not utilised as open finance and smart data evolve. Yet, I have personally watched as repeated attempts at driving progress in this space have failed because of a lack of resource and the continued misalignment of incentives. Lessons from midata and the onset of PSD2 itself – coupled with the failings of jurisdictions outside of the UK to capitalise on the new regulatory environment – prove that an authority figure, as well as dedicated resources is required.  

In conclusion, as I said at the start when it comes to open banking in the UK, we are far from finished. We have been tasked with delivering a public good – in the case of open banking that would mean 15-20 million adults using open banking services. I wholeheartedly believe we are on track to deliver this, and while I welcome any steps to put the governance of open banking on firmer footing, let’s just collectively (and strategically) ensure that what comes next allows us to keep moving forward, to keep building, and crucially, to keep growing.  

On 27th January 2021 the OBIE convened an expert panel to discuss the role that open banking can – and indeed should – play in addressing vulnerability.

Revisit the recording of the OBIE’s Consumer Forum event from 27th January 2021, which featured the insight and contributions of:

  • Faith Reynolds, Independent Consume Representative to the OBIE (Moderator)
  • Chris Fitch, Vulnerability Lead at the Money Advice Trust
  • Diane Burridge, CEO at Moneyline UK
  • Dr. Leda Glyptis, CCO at 10x Future Technologies
  • Joe Gladstone, Assistant Professor at the Centre for Consumer Financial Decision-Making at the University of Colorado Boulder – Leeds School of Business
Open banking and vulnerability: asking the big questions

Who defines vulnerability?  How should your financial data be interpreted, and who decides whether you match the definition? Who acts on this decision?

These big questions inspired a highly engaging discussion at the OBIE’s most recent Consumer Forum in January 2021.They’re not simple, and they sparked a discussion on the broader use of data and the morality of making assumptions on an individual based purely on interrogation of that data.

With the FCA suggesting that nearly half of all UK adults could be financially vulnerable, we probed how open banking could enable better products for everyone, no matter what life throws at them.

Vulnerability to what?

Chris Fitch, Vulnerability Lead at the Money Advice Trust, argued that any discussion had to start with the specifics: “What is the customer actually vulnerable to?”

He returned to this point again and again – explaining that we have to think beyond assumed causes or overly-broad definitions.

“Life events, health conditions, financial resilience, financial capability – these don’t tell us about harm, don’t tell us about detriment, or the pain a customer may face. They don’t provide guidance to the outcomes a consumer might face and, therefore, the action we need to take.”

Building a bridge to better financial behaviour?

Diane Burridge concurred in challenging the idea of ‘vulnerability’ as a monolithic concept. She used the phrase ‘State, not Fate’ to distinguish between an individual’s financial history and circumstances, and their future behaviour if certain vulnerabilities or other external factors could be addressed.

She went on to explain that, in the course of using open banking data in their credit underwriting service, Moneyline are moving towards being able to direct customers towards non-financial support systems for vulnerabilities that might be indicated in their financial data.

She said: “Where we can’t help responsibly with a credit product, we look to ways we can help maximise financial resilience. The rounded picture of circumstances with open banking data acts as a triage so we can signpost different forms of help in an informed way.”

But who designs the bridges?

The question of ‘informed support’ and intervention led to a hotly debated talking point: who makes the judgment that someone needs help? And, crucially, how to ensure that any such intervention is meaningful?

Dr Leda Glyptis of 10x Future Technologies was clear that this responsibility should not sit with banks – and indeed could not.

She explained that, while banks sit on lakes of data, the data isn’t structured in a manner that can be easily interrogated. So, due to systems, policies, talent, and resource, “unless you can ask clever questions, you don’t get the right information back.”

And that is why, as she went on to say, “[Banks] are part of the solution rather than the solution. They should participate in discussions, so that we can get to a place where servicing vulnerable customers and communities is something you can do as part of your normal business.”

Big data. Bigger questions.

This idea of ‘data lakes’ and the sheer masses of information being held within financial institutions raises another point – that of privacy.

Moving the conversation beyond the confines of open banking, Joe Gladstone argued that the metaphorical data genie has been let out of its bottle, never to be put back in. He went on say that, while open banking is a ‘gift’ for the purposes of understanding customers, society was lagging behind what is technically possible.

This perspective is not often aired at our Consumer Forum events – and sparked renewed debate within the panel – summed up by Chris Fitch when he posed the question, “just because we can do it, should we do it? And if we should do it, are we ready?”

The customer must always come first

Open banking – the data it leverages, and the services it enables – is ultimately focussed on empowering each of us with the potential of our financial data. And, our panel all agreed, the key to unlocking that potential in a responsible and ethical way is to ensure that Customers are at the heart of product development.

Designing simple, clear and effective propositions, with end user input, will be the key to realising the opportunity of open banking beyond simply developing products, but in transforming the financial experiences of all of us – and especially the vulnerable within our society.

By improving the focus on actual vulnerabilities, and by bringing ‘real people’ into the heart of design alongside Product Managers, Chris laid out a route towards addressing the outcomes of these vulnerabilities effectively using open banking data.

Open banking is an enabling technology: for people and businesses across the UK, it’s what they can dowith the apps and services it empowers that matters. Take a look at the different types of use cases open banking can enable – and visit our App Store today to start your open banking journey.

Open Banking does not endorse the products, services or statements featured in these videos. For further information see our website terms and conditions.

Affordability checks using accurate data – no more filling a shoebox with statements.

Rental recognition – ensuring that monthly payments contribute to credit scores.

Cheaper rates when paying abroad – making every penny count

Income streaming – replacing financial uncertainty with predictable earnings.

Income streaming – replacing financial uncertainty with predictable earnings.

Better outcomes with open banking

Open banking is enabling new ways of managing your money: financial products and services that deliver better outcomes.

They bring clarity and control into managing your finances. They produce credit scores calculated using rich, accurate and up-to-date information. They help safeguard the financially vulnerable.

Open banking exists to deliver better financial outcomes for you. With data shared securely, and only ever with your consent.

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Our Consumer Forum event on 8th October will explore the impact of open banking on responsible lending, creating flexible, responsive services, and helping to manage the impact of Covid 19.

Open Banking does not endorse the products, services or statements featured on this page. For further information see our website terms and conditions.

Consumer lending with open banking: much more than taking credit

Faith Reynolds, Independent Consumer Representative to the OBIE, shares her thoughts on the potential of open banking to transform consumer lending – and how to accelerate it.

Click here to register for the 1 hour webinar on this topic.

From a consumer’s perspective, applying for a loan can be fraught with anxiety, confusing, and complicated. Sometimes the reason for the loan itself drives worry and this can be exacerbated by the risk of rejection or just being ripped off. The process can be alienating: a dense marketplace full of jargon and %APRs, long applications and salesmen demanding to know your budget. It can be hard to know exactly when the money will arrive, what the repayments will be and what the overall impact of taking out the loan might be down the line. And who knows how you’ll be treated if a product you bought on credit fails or you fall behind on repayments.

So how can open banking help? At the next OBIE Consumer Forum on 8th October at 1pm, II’ll be joined by an expert panel to discuss how open banking is re-shaping the credit market. We’ll be hearing from Fair For You, HSBC, Equifax and Portify about open banking’s potential to increase access to affordable credit, avoid unhelpful friction, manage borrowing effectively, and defend against poor outcomes. And, if open banking is a good thing for Consumers – how can the market help build trustworthy open banking-enabled products that are worthy of consumer adoption?

Open banking is already being used in different ways by lenders. Our panel will be talking us through its impact on responsible lending, creating flexible, responsive services, and helping to manage the impact of Covid 19.

Supporting responsible lending
Improving the accuracy of affordability checks, based on data beyond just credit scores, is in-market already. How effective is open banking data in affordability checks? What are the opportunities of drawing directly from the open banking data well – rather than supplementing consumer provided data, bank statements or bureau data?

Creating flexible, responsive services
How can open banking support faster decisioning? What tools are there, or could there be, to support lenders so they can be proactive in identifying vulnerability or pre-emptively engaging with consumers to work through difficulties collaboratively? And what are the drawbacks – is this too much like ‘big brother’ in action?

Managing the impact of Covid
How can open banking support consumers stay on top of their repayments, seek out breathing space or access payment holidays when they need it? What does open banking mean within the context of loan consolidation? If consumers do end up falling behind on repayments, how can open banking support them in catching up?

Open banking is already impacting customer journeys and user experience – is now the time to bring that innovation into the heart of credit in the UK, for both lenders and borrowers? From 1pm on the 8th October, we’ll be discussing what works well today, what doesn’t, where are the challenges, and what opportunities are out there for open banking to deliver genuine value for consumers.

We hope you can join us.

The numbers of end users – individuals and small businesses – using open banking-enabled applications and services has grown to over two million. Below we examine what that means, the journey so far, how open banking has and will continue to impact those end users, and what the future’s continued growth looks like.

But what does that mean for you?

Our Implementation Trustee, Imran Gulamhuseinwala OBE, shares his thoughts on the real-world impact of open banking – and why it’s a good thing that two million people and small businesses are using apps and services enabled by open banking.

Where has the 2M come from?

David Beardmore, our Ecosystem Development Director, takes a look back at the origin of open banking in the UK, what it set out to achieve, and how a group of innovative companies came together to develop apps and products that use open banking to deliver better financial outcomes for their users.

Can you trust open banking apps?

Bronwyn Boyle, our Head of Security and Assurance, explains how the security of users’ financial data has been at the heart of open banking in the UK since day one – and how the use of trusted, established technology means that you can trust apps and services that use our open banking standards.

Where will open banking go next?

OBIE’s Head of Ecosystem Engagement, Simon Lyons, walks through some of the exciting new developments happening in the world of open banking – including its adoption by the UK government and new industries – without any compromise on data security or peace of mind.

Time to start your open banking journey?

Over two million people and small businesses are using open banking-enabled applications across the UK. Isn’t it time you harnessed the potential of your own financial data? Click the banner below to visit the OBIE’s app store today.

OBIE hosted a one-hour webinar examining the opportunities of open banking in supporting the UK’s SME community – helping to address the economic impact of Covid-19.

Open Banking does not endorse the products, services or statements featured on this page. For further information see our website terms and conditions.

Replay this panel discussion to hear UK small businesses’ view of open banking, how to communicate its benefits, and why open banking providers need to become “Champions” for SMEs. Featuring:

Key points from September’s SME Forum

At September’s SME Forum, I was joined by a panel of fintechs and business leaders who were reporting back from the ‘frontlines’ of their work with the UK’s small business community.

Our panellists included Zitah McMillan, CEO and Co-Founder of Predictive Black; Fliss Berridge, Director & Co-founder, Ordo; and David Carr, CFO and Head of Product, Clear Books. Each firm draws on the “magic dust” of open banking to transform the day-to-day financial requirements of businesses.

We also welcomed Andrew Gillespie, Co-founder of Lear Fitness. With a background in banking and current experience as a business owner Andrew did an excellent job of keeping our panel resolutely focussed on the needs of the small business.

In what was a lively session, we focused on three key areas:

  1. What’s the value? Tell me what’s in it for me.
  2. The obstacles to wider open banking adoption. How can we break down barriers – real and perceived?
  3. Seizing the opportunity. What does the future look like?

What’s the value?

How much do small business owners know – and need to know – about open banking? For Andrew, open banking providers had to improve their ability to articulate the real business benefits of their offerings rather than merely listing features.

We have spoken about ‘techno-babble’ in previous events – and the need for simple, benefits-based language was highlighted again and again.  Zitah explained that she often finds herself explaining open banking to customers, and reinforced how important it is to articulate the insight, clarity and control that business owners could acquire through open banking-enabled services.

Rounding off this point, Andrew reminded us that many small business owners will instinctively turn to their accountants for advice – and that any comms or language had to overcome concerns about introducing complexity, and therefore cost, into a business.

What are the obstacles to wider open banking adoption?

We heard that SMEs can be sceptical of the security pedigree of small fintechs compared with ‘familiar’ high street banks – who themselves have suffered breaches.

This resonated with Fliss, who said that both elements of ‘FinTech’ – finance and technology – can cause unease. The remedy, for her, was to reinforce the FCA’s strict regulation of our sector. “It’s open banking, but that doesn’t mean just anyone can take part.”

In response, Andrew reminded the panel that, if they could clearly demonstrate open banking’s security and value-add business benefits, they would position themselves as champions of small businesses. This – combined with reminders that they are small businesses themselves – could be an effective tactic to build trust in new markets.

What does the future look like?

While reliable crystal balls seem to be in constant short supply, nevertheless we asked our panel their views on what excited them about the future of open banking.

Fliss explained that the evolution and launch of Variable Recurring Payments provided tremendous opportunity to rethink and replace Direct Debits – improving choice and control for merchants in line with the government’s New Payments Architecture.

For Zitah, the business benefit lies in extracting more value from users’ data: the application of increasingly sophisticated AI and machine learning techniques to support forecasting and pre-emptive analysis.

David shared his thoughts on how open banking can bring accounting and banking much closer together. Paying payroll with a click – combined with straight-through submissions to HMRC via one screen. These powerful new experiences could help users manage their finances in a slicker, more secure way.

Join us next time…

I’d like to extend a warm thank you to our panellists and to those who attended the forum. As a team, we will be reconvening soon to engage in another think tank which will shape the next topic for discussion – payments.

We hope to see you for our next forum in December where the conversation will explore how open banking payments can make small businesses more resilient, productive and profitable. You can register your interest here.

Mark Chidley,

Independent SME Representative to the OBIE

Getting Real: Open banking from the frontline.

Ahead of what promises to be an insightful panel discussion on 23rd September, Mark Chidley (Independent SME Representative to the OBIE) shared his thoughts on the topic of discussion.

Don’t forget to reserve your place by registering today.

For many of us in the UK, September is a time of new beginnings, as summer comes to an end and we begin to lay the groundwork for the year ahead. The open banking world is no different, and we are looking forward to welcoming you to our next SME Forum event, at 12pm on Wednesday 23rd September . We’re delighted to be hearing from new faces from within our industry as well as small business owners. While Covid-19 continues to dominate headlines and debate, our panel will bring a fresh perspective and renewed focus on how open banking is supporting the UK’s SME community address the economic impact of Covid 19, including:

Demystifying the impact of Covid19 on SMEs

While we’ve all heard guesses and ‘expert opinions’ in the press, OBIE’s SME Forum is committed to bringing you real-world, evidenced insight from the ‘business end’ of the SME community. Each of our panel members have spent the year speaking directly to their small business customers and getting to understand the real-world situations small businesses across the country are facing. We’ll be asking them to share their experiences, as well as their thoughts on how open banking might help.

Gauging SMEs’ appetite for digital solutions

Our contributors will be reporting back from their discussions with SMEs, on their willingness to embrace new technologies at a time when there is so much else to worry about.

Building towards a common language

Many of us know that it can be difficult to make a case for open banking without resorting to acronyms, industry-babble and techno-jargon. We’ll be challenging our panel to solve that – or at least get us on the road towards a clearer picture – with their efforts judged by our SME representative.

Channeling advocacy to encourage adoption

Where should the big open banking conversations start? Does it need a top-down approach driven from Westminster, or a ground-swell of testimonial and word of mouth? What means more to the SME owner – and how can we encourage that potentially vital decision to adopt?

Taking tomorrow into the equation

With so much of our focus on the here and now, it can be easy to lose sight of the months and years ahead. But for SME owners, preparedness for tomorrow can be the difference between surviving and thriving. So – as economies continue to react and CBILS / BBLS money (eventually) run out – how can open banking offer small businesses opportunities to make real, lasting improvements in the way they do business?

These topics and more will be covered at our upcoming SME Forum – please register using the link below, and don’t hesitate to submit any questions in advance either to marketing@openbanking.org.uk or via any of our social media channels. We look forward to being ‘back in the classroom’ with you soon.

Mark Chidley,

Independent SME Representative to the OBIE

Building on a recent presentation at the Open Banking World Congress, OBIE’s Miles Cheetham discusses the options available to maximise consumer trust in open banking – a key consideration in any conversation around increasing end-user adoption.

https://player.vimeo.com/video/425831162
This 30-minute presentation by the OBIE’s Miles Cheetham and Nathan Kinch from Greater Than Experience opened day two of the Open Banking World Congress – a three-day digital event from 12th – 14th May.
The full agenda of keynote presentations, panel discussions and industry debate is available on-demand – register now to review this unique content.
Targeting Trust in open banking

In May 2020, OBIE’s Miles Cheetham and Nathan Kinch of Greater Than Experience presented at the Open Banking World Congress, on the topic of “Informed Consent; Meaningful Ethics; Achieving Trust.”

Here Miles Cheetham expands on that presentation, providing an insight into key considerations around consumer Trust in open banking, and a vision for the future.

Trust: the key to adoption

Consumer Trust is a critical factor in the success of open banking. Key to this is the way in which the consumer grants and manages consent to use their personal data. The potential of open banking – and by extension open finance and Smart Data Initiatives generally – relies on this crucial point.

Here at the Open Banking Implementation Entity, we have looked hard at the whole customer journey, breaking much new ground with the widely referenced Customer Experience Guidelines, particularly how Third Party Providers request consumer consent, and then enable that consent to be managed or revoked.

In mid-May, Nathan Kinch and I presented a case study at the Open Banking World Congress on the progress that has been made to date. Now, I’d like to share some of the insight we’ve gained, as well as our vision for the next stage of enabling consumers to place their Trust in open banking.

Solving for X-perience

Great things can happen when you set out to solve a genuine consumer problem. You know how it goes.

Set up a new app, click and move on…oh… a set of T&Cs…scroll to the bottom…click “I Agree”. And there you have it. Did you stop and read them? Probably not! Most of us never read the T&Cs.

We are all agreeing to things that we might question if we had the time, energy and (occasionally) the law degree required to read them. What is worse is that the ‘small print’ can obscure things that maybe we wouldn’t be so keen on. At worst, companies can shield themselves and a business model that customers simply have to accept if they want to get what’s on offer. To me, that’s not acceptable.

So back to Trust. A thriving, successful open banking-enabled ecosystem demands it – not least as empowered consumers are starting to understand the value of their personal data, question the status quo, and demand far greater transparency and control.

Comply, Compete, Innovate

Trust is a complex thing to achieve however and raises many questions. We have seen at first-hand how TPPs actually create and provide their services – and noted in particular the onward sharing of data: the ‘provisioning chains’ between parties that combine to create the end product. So, how should TPPs ensure that they meet their regulatory obligations, while delivering a great customer experience? How confident should TPPs be that they are, indeed, compliant?

If a consumer has numerous active consents – likely impacting multiple parties in the provisioning chain – can a TPP really be confident that where data is shared, their regulatory obligations are met? What if the lawful basis for data processing in a fourth party may need to change?

Some of the parties in a provisioning chain will be regulated under PSD2, some may be outside the regulatory perimeter. Some may fall within the scope of more than one regulator. Not all parties will be visible to each other, particularly where they fall outside the regulatory perimeter. All parties would need to consider GDPR obligations which apply to them.

As Nathan and I explained at the Open banking World Congress, there are still questions to answer – and there is work to do to highlight key points to the consumer. This is already underway, as detailed in the latest version of the OBIE Customer Experience Guidelines.

So, as open banking and data sharing generally grows exponentially, the ecosystem evolves, and data volumes increase, how do we protect the consumer and keep their Trust?

A vision for the future

A critical component to any discussion about the future-state of open banking is the recently published Open Banking Roadmap – which includes TPP-side Customer Protection. Ensuring that TPPs maintain the highest standards in this area is crucial: customer consent sits at the very heart of open banking and, let me stress again, is one of the foundation stones of customer trust.

We know from both our own as well as published consumer research, That consumers have limited appreciation of the data ecosystem. They are unaware of the extent of data sharing, and some believe, incorrectly, that data transactions are bounded.

The time has come to push forward on this new frontier and build on the strong foundation we have established to date.

In response, the future of open banking will build on the existing TPP Guidelines in addressing all aspects of consent and permissions, paying particular attention to the codification and purpose of data sharing.

Codification of consent

A codified approach to consent could, if done well, bring data protection laws to life in a more meaningful way to the benefit of consumers and TPPs alike. We will be working with the Information Commissioner’s Office (ICO) to explore relevant best practice, which interestingly already makes a series of recommendations about what information should be included within a data sharing agreement. These recommendations include:

We’ll be exploring the feasibility and design of consent capture as well as the feasibility of enabling traceability and auditability. This, of course has far-reaching consequences as it will reveal the potential for a consent standard – possibly with the associated API specifications and metadata.

Put simply, this is a very exciting time for shaping the future of consent for services, alongside the use of data. These components could result in really effective consent management dashboards, by establishing a foundation for the transparency, tools and controls, that consumers will require to feel confident about how their data is being used.

This work will go deeper than Customer Experience as we’ll be building on the best practice Operational Guidelines already published. There are process and procedural implications when considering data that is onward shared across the provisioning chain, and we want to ensure that all parties have access to information on applicable regulatory considerations and best practice.

Progressing together as an industry

Today, we are standing on the frontier I mentioned earlier. We are charting a way forward into exciting new opportunities and looking for the right way for consumers to stay protected and informed, with greater control of their personal data. We’re looking for strong benefits and above all, Trust.

This activity must work for the ecosystem, whether TPP, ASPSP or non-regulated parties that combine to enable open banking to thrive and succeed. After all, if it doesn’t work for the market, it won’t deliver to the consumer. Therefore, I’ll leave you by urging you to be part of this discussion and help to shape what the OBIE does in this space.

The consultation on this work will start in July and run for two months. Let’s be bold in our ambition, because if this is done well consumer trust will be high and propensity to use OBIE enabled services will therefore continue to climb – key ingredients of a successful data-sharing economy and setting the bar for data sharing across other sectors and markets.

Miles Cheetham

May 2020

Credit Unions are beginning to embrace the opportunities of open banking, as they continue to provide their members with a wide range of products and services, play an important role within their local community, and contribute to the vibrancy of the UK’s financial services landscape.

Open Banking does not endorse the products, services or statements featured on this page. For further information see our website terms and conditions.

Download the Finance Innovation Lab report

Open Banking has been hailed as a revolution in financial services. But what does it mean for organisations, like credit unions, who are at the forefront of supporting people to manage their finances and access fair services?

Download this new briefing today, Open Banking: An introductory guide for credit unions, where  Finance Innovation Lab’s Head of Programmes, Marloes Nicholls, demonstrates the importance of this question, and the need for wider debate and action across the credit union movement – and beyond. Published by the Centre for Community Finance Europe.

Lending Better, Together

Download this short visualisation today, as it brings to life three of the use cases identified in the Finance Innovation Lab’s recent report. Demonstrating the potential of open banking to transform the lending process for credit unions and their members.

View the infographic.

Open Banking: an introductory guide for credit unions is a new report published by the Centre for Community Finance Europe and written by Marloes Nicholls, Head of Programmes at the Finance Innovation Lab. In this blog, Marloes shares some background to the guide and her key findings.

To demonstrate the importance of the question, ‘What does open banking mean for credit unions?’, and the need for wider debate and action across and beyond the credit union sector, I partnered with the Centre for Community Finance Europe to publish a new guide on Open Banking for credit unions.

Open Banking and credit unions

Open banking has reached the credit union sector. In researching for this report, I discovered that at least 10% of credit unions have formed partnerships with fintechs to use open banking. For example, Central Liverpool Credit Union (which is working with Lab Fellows NestEgg.ai) is using its members’ data to improve the accuracy of credit risk assessments and the efficiency of their loan application process. This has meant they can now offer loans to people who were previously declined on the basis of traditional, out-dated, credit data alone. As a result, in the run up to Christmas 2019 they lent £700k more than in the same period 2018 and saw their fastest ever winter membership growth rate.

Central Liverpool Credit Union’s online loan application process is also fast – capable of competing with the instant decision-making and user experience offered by many high-cost, short-term lenders, and potentially freeing up staff time for other work that is better suited to in-person meetings with members. As a part of Nesta’s Affordable Credit Challenge, they started developing an app for members which will use open banking data to help them better understand their own financial situations and the action they can take to improve their financial health and creditworthiness.

My research and analysis suggests that, combined with appropriate IT, oversight and governance, open banking has the potential to radically improve credit union operations, responsible lending decisions, and member engagement and support. However, I also uncovered and anticipate serious risks and challenges. These include using and misinterpreting open banking data in ways that lead to less responsible lending decisions, ballooning exposure to the risks of sharing members’ data with third parties, and – most importantly – heightened financial exclusion and reduced support for the people who need it most. If open banking is to contribute to shaping a future financial system that delivers better outcomes for local communities, and is not to undermine a sector that is already trying to fix the problems of our broken financial system, then it is vitally important these risks and challenges are understood.

For credit unions to harness the opportunity open banking presents, and ensure that it is used in a safe, impactful, cost-effective and sustainable way, will require movement-wide collaboration. At the Lab, we look forward to continuing to work with credit unions, including with the Centre for Community Finance Europe, and policymakers, including the Treasury financial services team who I presented the early findings of this research to.

Open banking matters

Whether a credit union decides to use it or not, open banking matters. It is set to be a major feature of our increasingly data-driven financial system – and our lives. Already, the open banking agenda has expanded to ‘Open Finance’, whereby people could share a wider set of their financial data (such as pension, mortgage and insurance data) with third parties. To ensure that this major development evolves with the interests of people and planet at its heart, the Lab will be calling for organisations like credit unions and responsible finance providers, along with debt advice agencies and other charities, to be meaningfully involved from the outset.

The Finance Innovation Lab has been working on open banking, and in particular exploring its implications for the financial system, people and planet, since 2018. Our work has included hosting a roundtable and publishing a briefing on the opportunities and risks of open banking for financial health in the UK, co-hosting the 2018 open banking convention with the Open Banking Implementation Entity, and working with consumer groups to produce the Open Banking Consumer Manifesto. In 2019, we selected data as the theme for our incubator Lab Fellowship and supported 10 data-driven, purpose-led financial innovations, including open banking powered apps like CoGo and Bippit.

If you’d like to find out more, and explore ways to build on this work, contact marloes@financeinnovationlab.org. This blog is edited from an original version that appeared on the Finance Innovation Lab website, here.

OBIE spoke to six of our member firms, to better understand the many ways that charities and non-profit organisations can benefit from open banking-enabled services. This insight forms part of our #PowerOfTheNetwork campaign – shining a light on the efforts of the open banking ecosystem to address the economic impact of Covid-19.

Open Banking does not endorse the products, services or statements featured in these videos. For further information see our website terms and conditions.

Covid-19 is having a devastating effect on both the physical and financial health of people across the country. Addressing the economic impact of the pandemic, problem-solvers from the open banking community and broader financial services industry have been stepping up with new ideas for unprecedented times. At OBIE, we are shining a light on those members of our community who have answered the call: and so #PoweroftheNetwork was born.

The ‘Third Sector’ is under particular strain – working to support those vulnerable groups most affected, at a time when demand for their services is growing while important sources of funding have temporarily shut down.

We spoke to representatives of six firms within our open banking ecosystem – to better understand why they stepped forward, how they are helping, and how the Third Sector is benefitting from their open banking enabled solutions.

Answering the call

What spurred each of our contributing firms into action?

Token engaged quickly with UK government – as a Crown Commercial Service supplier, they submitted many ways they could help: ensuring beneficiaries were eligible, that payments went to the correct beneficiary, that receipt of funds was done efficiently. Michael O’Loughlin, Managing Director at Token, expanded that their proposals “clearly have broader applications for anyone looking to receive money from a third party, be it a charitable disbursement or a loan.”

Both NuaPay and EcoSpend targeted the operational impact of Covid-19 on charities. Nick Raper, NuaPay’s Head of UK, explained how ‘stay at home’ orders impact donations: “We saw data that charitable donations were significantly down as a result of Covid-19 and declining footfall on the streets, and felt compelled to try and reverse the trend by raising money through online channels.”  For Dr. Josh Cowley, Head of Data Science at EcoSpend, the focus was reducing charities’ operational costs. “We realised that donors were paying unnecessarily high fees to transfer funds to the NHS and other recipients.  We wanted to eliminate those costs so that a donor’s money reaches the intended recipient for the fight against Covid-19 without unnecessary charges.”

David Atkinson, Head of Product at Citizen is working to help charities answer the digital question: “Receiving donations comes with technical challenges, especially leveraging the latest payments infrastructure. We’re helping bridge the gap between organisations at the fringe of fintech innovation and the benefits of using Open Banking: any organisation can start using this quickly, without having to do the technical heavy-lifting to get up and running.”

For some, it was more about realisation than inspiration – understanding that the business they had been building could be the right answer, in the right place, in the right time. Mujtaba Jaffer, PledJar CEO, explained, “We launched PledJar earlier than planned on Android to provide a more financially manageable alternative to fixed direct debits, by enabling users to donate their digital spare change.” Bottomline Technologies had a similar experience. According to Chris Spalding, Commercial Product Manager, “Since 2019, Bottomline has run an internal PISP (Payment Initiation Service Provider) donation service, which enables our employees to donate to our chosen charities. We have used this as the foundation for a market-facing solution aimed at small clubs and societies.”

The Benefits of Open Banking

Each contributor agreed that open banking can help reduce the cost of fundraising via card payments. Nick from NuaPay pointed to savings of up to 30% compared to cards: “For a charity raising £1 million, that can leave them with an extra £12,000 (or 1.2%) to fund critical activities.”

A second benefit to charities is the speed of settlement. According to Chris at Bottomline, “As a result of closing their doors due to Covid-19, clubs and societies have seen a massive reduction in funding as members cancel direct debits.” As David at Citizen explained, the UK’s faster payments network mean that “charities get donations instantly and can put the money to work right away.”

For PledJar’s Mujtaba Jaffer, open banking can bring charitable donations into our everyday financial lives. “If shoppers can round up purchases and donate their pennies digitally, we reclaim what would otherwise be lost income for the third sector – enabling them to rely on regular donations rather than one-off gifts.”

And our ecosystem members are willing to go further: Token and EcoSpend have committed to absorbing costs for third sector organisations. EcoSpend’s Josh Cowley wants “potentially significant cost savings for donors, and thus increased receipts for charitable organisations.” Token’s Michael O’Loughlin put it plainly: “We are in this together, and we are keen to do our bit to help the community recover normality as quickly as possible.”

Measuring the response: FinTechs, Charities, and Consumers

Michael at Token has seen “…a tremendous amount of positive activity amongst the Fintech and wider start-up community both in the UK and across the world.“ But how does that translate to the charities and non-profits – and of course consumer up-take?

Josh at EcoSpend reported warm sentiment from the charities he has contacted, and Citizen is already up and running: “We are providing fee-free donations for Shelter and YoungMinds – we can get charities up and running in about a day.”

For non-charities in the Third Sector, white labelling can help give members peace of mind. As Chris from Bottomline explained, “We are in the process of modifying our own donation service to allow customers to submit their brand elements online. The inclusion of the brand identity into the payment initiation journey builds confidence with their members and automation speeds the set-up.”

There are encouraging signs of donors being receptive. Mujtaba from PledJar reported directly from the coalface: “We’re working with the Small Charities Coalition, an umbrella with a network of more than 10,000 charities, as well as medium and larger charities directly. The success of our soft-launch and our market research both prove that there’s a wealth of consumer interest in the concept.”

Finally, open banking is optimising that all-important user experience, with NuaPay’s Nick Raper reporting “many comments on how easy it was to make a donation on your mobile.”

Open banking supporting the Third Sector beyond Covid-19

Each contributor agreed that the work of the open banking community is not yet finished: NuaPay are working on new, near-to-launch initiatives, and PledJar are preparing for an iOS app store launch. David reaffirmed Citizen’s focus on enabling access to open banking’s infrastructure, “especially for businesses without an online presence or app.”

Josh Cowley explained that EcoSpend are targeting a second challenge: “to allow self-employed individuals to cut through the paperwork,  by drawing data such as their past tax and remittances to HMRC, their latest income and other information directly from their bank accounts and submitting the data automatically to the Treasury.”

Michael O’Loughlin pointed to the potential of ‘Request to Pay’, a service that Token will align to Pay.UK standards: “Request to Pay gives individuals, gig economy workers,  and businesses a new way to communicate bill payment requests to their customers and allow them to pay remotely. It has the flexibility of cash but the automation advantages of a digital payment solution.” Personal Finance Management tools, many enabled by Token, have a role: “The saying ‘Knowledge is power’ has never been truer and we want to empower people to use their data to help improve their financial position.”

As the Covid-19 outbreak disrupts the lives of millions across the world, we are working to promote and showcase those members of the OBIE ecosystem who are stepping up to help others.

If your company should be listed here, contact comms@openbanking.org.uk.

Open Banking does not endorse the products, services or statements featured in these videos. For further information see our website terms and conditions.

MogoPlus launch Hardship Management Solution

Open banking and the Third Sector

Truelayer develop donation platform
CreditSpring develop forebearance solution

Nesta Open Up Challenge finalist CreditSpring are using open banking to make it easier for members to show their needs for forbearance, as well as make to facilitate the granting of forbearance: a seamless process to get help to the people who need it, with little friction. Members who are at higher risk of seeing a significant drop in earnings, can leverage open banking to certify that they have not had a drop, and therefore can responsibly access a loan.

CreditSpring are also taking variables from open banking to add to their StabilityScore, helping our members build their stability in simple steps.

Credit Spring continues to use open banking to verify an applicants’ income in parallel with more traditional ways, and are exploring a ‘re-verification’ of income at the time of a customer borrowing, to ensure responsible lending.

Visit their website to learn more.

Predictive Black supports SMES with financial forecasts

The Covid-19 crisis has left lots of SMEs requiring more help and support in getting their financial forecasts right. Predictive Black has launched a 3-month free trial of their platform, which brings powerful artificial intelligence software together with the power of open banking and macro market and economic data to create predictive forecasts of a company’s revenue, costs and cash.

Newly developed responsive scenario planning functionality has also been added to the service, meaning SMEs can work through and save any number of scenarios, plus download the output to support any loan applications.

Learn more about the Predictive Black service here.

And subscribe to Premium Teams using the promotional coupon code OBPOTN for three months free.

Funding Options provide alternative route to CBILS funding for SMEs

Funding Options are providing an alternative route for small and medium enterprises looking to access emergency funding via the Coronavirus Business Interruption Loan Scheme.

Read more details here.

Funding Options have also teamed up with ClearBank and its founder, Nick Ogden, to lobby the government to allow non-banks to administer CBILS funding.

More information on that activity here.

EcoSpend enables free payments to NHS

Ecospend is making its payment services available free of charge for payments to the NHS by individuals and charities, to support our frontline workers and providers who are leading the fight against the Covid-19 pandemic.

Ecospend is an open banking technology platform that matches supply and demand for high quality financial data for businesses and consumers.

Learn more about EcoSpend here.

Akoni Supporting SMEs, intermediaries and partners during Covid 19

Akoni is continuing to provide their cash marketplace and tools free to SMEs and have focused in particular on retail and IFA/white label solutions. They offer a range of cash and risk tools including bank diversification, competitive rates, as well as:

  • 5 Minute Digital onboarding: businesses and consumers can onboard from remote working environments – anywhere – with all anti-money laundering performed in lockdown
  • Time saving Cash Planner tools: simple access to balances and recent transactions, including instructed deposits
  • Partner and White Label solutions: Wrapped users can now create their accounts and utilize the features Akoni has to offer. For SSAS, SIPP, Trust or Offshore bonds, users can now manage cash effectively via the Akoni platform.
  • White Label Solutions – rapid delivery: Akoni are offering a free branded platform for channel partners, including IFAs, wealth managers/platforms as well as banks and insurers

Learn more about Akoni’s offerings at this time here.

Helping consumers and businesses through difficult times.

MiaPago launch INK C-19 tracker service


Token announces set of Covid-19 measures

Personal financial management app free for 6 months

OKEO working to support the financially excluded

OKEO is developing innovative affordability and credit risk models using current “crisis data” to lend money to financially excluded young adults at low rates during the pandemic. By utilising innovative data modelling and lending to critical sectors of the economy, OKEO’s vision is to help meet the needs of financially excluded individuals and help stimulate the UK economy.

OKEO is a London-based challenger credit card company that uses Open Banking and machine learning to provide access to affordable credit. The firm is now innovating to respond to the financial needs of individuals brought on by COVID-19 and a weakened economy.

Learn more about this new approach to lending here.

Untied.io supports gig economy workers an the self-employed

untied has launched untied for gig workers. It’s a new streamlined and simple product designed specifically to help gig workers prepare and submit tax returns. untied is making the service free to help people make sure that their tax returns for 2018/19 are submitted to HMRC by 23 April, the deadline for people to be eligible for the Self Employment Income Support Scheme (SEISS).

untied is also offering its personal tax app for free for new users during the crisis. This will help the wider group of self employed people make sure they are up to date. untied uses Open Banking and other data to gather information, makes tax sense of it and submits filings it to HMRC. untied, the UK’s personal tax app, is recognised by HMRC, supervised by the Institute of Tax, and regulated by the FCA. With untied, there is no need for an accountant – you can follow the rules and reduce the tax you pay by being an expert in yourself not an expert in taxes. Thanks to HMRC integrations, tax returns can be submitted straight from untied.

Learn more about this new tool here.

Kalgera makes app free for families and carers of vulnerable people

Kalgera has announced that it is providing free access to its app to the families and carers of vulnerable people in contact with volunteers or trusted shoppers to remotely be alerted to unusual activity on their bank accounts. This will act as a deterrent to financial abuse, and will also detect and help prevent fraud. Kalgera has signed up to the C-19 Business Pledge to do whatever it can to help those most affected by the pandemic.

Kalgera’s mission is to safeguard the financial lives of vulnerable people. With COVID-19, it has become apparent that vulnerable people need support from people whom they trust and volunteers to purchase essential items on their behalf.

To access Kalgera’s service, simply register online at https://kalgera.com/usekalgera.

Credit Passport provides support tools for SMEs

Credit Passport have created two powerful new tools for SMEs to navigate the crisis, both available for free:

  • A liquidity shortfall calculator – to allow SMEs to understand how much they may need to borrow to bridge the next 6 months.
  • A Pre-Crisis Credit Report – to demonstrate to lenders and other institutions the financial quality before impact, eligibility, and impact of the crisis on the business.

Additionally, their Learning Centre now features the Covid-19 Resource Centre where business owners can find jargon free advice and tools to understand their options and find help.

AccountScore supports SME lenders

AccountScore is supporting SME lenders during the Covid-19 outbreak by “assisting them to effectively place capital into the hands of SMEs that require it to keep their business and the wider economy functioning.”

Read the announcement in full here.

AccountScore is also working with Equifax to support businesses and consumers when it comes to identifying the income and identity of a consumer looking to secure online products during the COVID-19 era.

Learn more about this initiative here.

‘Coronavirus Lighthouse’ offers guidance to people and businesses.

Starling Bank launches business support tool.


Snoop plans launch of personal finance management app.
Swoop Funding’s coronavirus helpline for SMEs

Nesta Open Up Challenge finalist Swoop Funding has created a phone hotline for small and medium businesses based in both the UK and Ireland, with information on accessing the grant and funding options that are available to them.

UK: +44 (0) 203 868 0364

Ireland: +353 (0) 1 903 6135

Ducit.AI launches debt advice solution.

Ducit.AI, who combine open banking data with artificial intelligence-based analytics to enable better financial decision making, have launched a new tool to help debt advisors quickly gain an accurate understanding of their clients’ financial health.

Read in greater detail here.

Plaid makes platform free for Covid-19 development

Plaid, an Open Banking platform that connects to over 11,000 financial institutions in the UK, Europe, and North America, is offering free access for developers directly working on solutions to the pandemic. Please reach out to them for more details at europe@plaid.com.Visit the website here.

Tully launch payment relief resource

Tully, the open banking-enabled debt management provider and sister company of OpenWrks, have announced the launch of a new online resource that helps people understand, and access, the payment relief they may be entitled to during the Covid-19 outbreak.

Access the free online tool here.

Ordo Pay make person-to-person payments free

Payments provider Ordo Pay have launched a new initiative, Ordo Neighbour2Neighbour, making it free for the UK’s volunteers to help out during the COVID-19 outbreak.

Watch the explainer video here.

Getting support to where it’s needed most

Toucan supports consumers with mental health issues.

NuaPay enables donations to the NHS.
Citizen offers fee-free payment processing for charities.
Coconut launch campaign for self-employed income support

A combination of OBIE ecosystem participants are calling on the Chancellor to do more for self-employed people during the Covid-19 outbreak – and plan to release a free-to-use Self-Assessment Calculator for fast 2019/20 tax returns. This web tool will be built on Coconut’s existing accounting and tax technology, and be made freely-available to everyone.

Visit the campaign page here.

FinTech Taskforce for Covid-19 Launches

Trade Ledger, a digital lending platform; Wiserfunding, a digital SME credit scoring platform; Nimbla, a trade credit insurance provider, and NorthRow, a remote client onboarding platform have established a new fintech taskforce to provide a turn-key origination and underwriting platform that allows banks, alternative lenders and private debt lenders to virtually and digitally deploy funds to businesses during the Covid-19 outbreak.

Read the full article here.

CovidCredit.uk launches to help self-employed prove income

A team of developers from CreditKudos, 11:FS and Fronted joined forces over a single weekend to build and launch CovidCredit.uk, a work-in-progress income verification tool that demonstrates how open banking data could help self-employed people demonstrate loss of income during events like the Covid-19 outbreak.

Visit the website here.

iwoca launches new Open Lending platform

iwoca announced the launch of their new Open Lending platform, enabling their partners to make fast and flexible funding available to small and medium enterprises when they need it. The timely introduction of this new source of credit comes during a period when bank branches are closing across the country.

Read the press release here.

Experian offers affordability passport for free

Experian will be offering its Affordability Passport to organisations, including debt charities and lenders, for free as part of its response to the coronavirus outbreak. The open banking tool allows people to share their credit report and transaction data via a secure platform, providing a clear picture of an individual’s financial circumstances and commitments in rapid time.

Read the full article here.

Truelayer makes open banking platform freely available

OBIE ecosystem member Truelayer issued a call to arms to government agencies, charities, healthcare providers, app developers and hackers, offering to share their “expertise and technology, free of charge, to anyone who wants to use Open Banking to help reduce the impact of COVID-19.”

Read the full blog post here.

NestEgg.ai calls on credit reference agencies during Covid-19

NestEgg.ai, who partner with TSP Truelayer to provide open banking-enabled services to credit unions across the country, has called on credit reference agencies to take a holistic view of credit-score-related decisions, as the likelihood of defaults and missed payments will increase due to the disruption caused by Covid-19.

Read the blog in full here.

Fractal publishes Covid-19 guide for SMEs

Fractal, the AI-powered financial assistant helping businesses better manage their cash, have published a comprehensive guide filled with information about the support available to small and medium enterprises across the UK during the Covid-19 outbreak.

Read the guide in full here.

Consumer protection is central to our Open Banking Standards, and already it is clear that Open Banking has a valuable role to play in helping vulnerable customers manage their financial data. We take a look at some of the initiatives, apps and services that are being developed, with particular focus onto the area of money and mental health.

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Open Banking & Mental Health

Open Banking is working hard to be a force for good in society: making money work for vulnerable customers experiencing mental health issues, and empowering these people to move, manage and make more of their money.

FCA Consultation: Fair Treatment of Vulnerable Customers

On 23rd July 2019 the FCA published draft guidance for financial services firms’ treatment of vulnerable customers, with the FCA’s definition of vulnerable customers, the scale of the issue, its potential impact, and early thoughts around how it expects firms to treat vulnerable customers.

Open Banking and mental health: transforming more than payments

Faith Reynolds, Independent Consumer Representative to the Open Banking Implementation Entity, shares her views on Open Banking’s potential to support and empower people experiencing mental health issues.

A quarter of all people experiencing mental health problems are in debt. Last year over 100,000 people in problem debt attempted suicide. 93 per cent of people with mental health problems spend more when they’re unwell. These statistics from the Money and Mental Health Policy Institute should shake us up and get us talking.

This week is Mental Health Awareness Week. Approximately one in four people in the UK experience mental health problems each year, with a combination of depression and anxiety being the most frequently experienced type of health problem. For many people, thinking about money is anxiety-inducing and talking about it is depressing. Money provides security, affirms our identity and our sense of personal power – people’s finances have a direct impact on their emotional well-being. When we’re struggling financially or mentally, it can affect us in more ways than one.

This is why the potential of Open Banking is so potent. Our industry is increasingly in a position to ‘connect the dots’ between people’s financial health and their mental health. Open Banking has a valuable opportunity to be a force for good, driving more sensitive and personalised services which could improve wellbeing and benefit all society.

Transaction data shared via Open Banking provides fertile soil for innovation. A number of firms have already responded to the ‘Stopper Shopper’ trials run by MMHPI, which showed the benefits of giving people the option to block spending on certain sites or at certain times of day. Account aggregation and the insights it enables can provide a new sense of control, which has been difficult to attain before. Tech firms are looking to build account assistants, giving people the option to nominate a friend or carer when their financial circumstances drop below a certain threshold, or seem out of kilter. Open Banking is revitalising the debt sector, affording consumers simpler and less stressful ways to get help. There is yet more potential for mainstream aggregators – fintech firms and banks who have launched solutions that enable users to see all of their bank accounts in one screen – to identify indicators for debt earlier and refer people for help more quickly.

But trust is essential. Work by Barclays, where they surveyed customers on sharing their data to identify vulnerability, shows that where people have good experiences of financial services, they are more willing to trust firms to intervene to help them (based on their data). However, where customers have been impacted, they remain sceptical. It is critical that we have strong controls in place to ensure that consumers and their data are not only ‘protected’ but respected – and that consumers know that the firms they sign up to really are on their side.

This speaks to a different kind of culture – one that’s more people focused. It’s also one that’s not afraid to talk about mental health in the workplace. Learning to have healthy conversations about mental health in the workplace is important for our growing start-ups and economy. It’s great to see Monzo proactively championing mental health in the workplace, as well as industry figures like the Competition and Markets Authority’s Adam Land sharing his own experiences with such honesty.

Facing the reality of our humanity and our mental health stories is sobering, but positive developments like those outlined above also give rise to celebration. Even at the beginning of the Open Banking journey we’re seeing positive efforts to reflect the needs of real (rather than perfect) consumers. As Open Banking grows, I am looking forward to seeing how it changes lives (and not just payments) for the better.

To learn more about what Open Banking is doing in the area of supporting vulnerable customers, visit www.openbanking.org.uk/insight/vulnerable-customers/

Standards designed with vulnerable consumers in mind

OBIE has placed the needs, security and protection of vulnerable consumers, such as those experiencing mental health issues, at the heart of our API Standards and Customer Experience Guidelines. Read this short summary of why that is, as well as an overview of the guidelines provided to Open Banking participants.

Can data and AI help break the link between money and mental health problems?

Brian Semple, Head of External Affairs at the Money & Mental Health Policy Institute, on potential intersections between personal financial data, mental health, and the ethics around Banks’ & FinTechs’ use of this data to positively support vulnerable people.

Financial difficulties and mental health problems are closely interlinked. People with mental health problems are three and a half times more likely to be in problem debt, while half of all people in problem debt have a mental health problem. Over time this can drive a destructive cycle – each year over 100,000 people in problem debt attempt to take their own life.

Lots of organisations have a role to play in breaking this link, from the government and regulators to the NHS and local authorities. But financial firms can also make a big difference. For a start, they are often the only organisations which know when someone is struggling with their finances, due to the stigma around debt.

Moreover, financial firms are well-positioned to spot when someone’s financial situation may be suffering due to poor mental health or other challenges, thanks to the customer transaction data they possess. These datasets are already analysed by firms for marketing and fraud protection purposes. But use of these datasets — when combined with innovations in open banking and AI — has the potential to transform the capacity of financial firms to both identify and support customers experiencing financial difficulty and mental health problems.

For example, someone experiencing a manic phase of bipolar disorder may be more vulnerable to impulsive spending or losing track of their finances. Others affected by depression might withdraw completely from financial management when unwell, resulting in unpaid bills stacking up. In both these situations, it’s very likely that those patterns of behaviour will become evident in their transactions data.

The question, however, is what firms should do next. Some people will welcome their bank or creditor keeping an eye on their spending patterns, and making contact if they raise concerns. Some others may prefer to access these types of services from independent third parties (FinTechs that are regulated by the FCA and registered with OBIE), rather than their banks. And there will be those for whom the idea of a bank monitoring their data is uncomfortably Big Brotheresque. Given these big ethical questions around privacy, consent and customer appetite, and the technical challenges that using data poses, it’s unsurprising that financial firms have thus far been reluctant to act.

To address these questions, Money and Mental Health is undertaking a ground-breaking programme of work with the Financial Conduct Authority, exploring how financial firms can use transactions data and AI to identify and better support people struggling with financial difficulties – with the aim of offering timely support to people who may struggle to ask for help due to a mental health problem. This will culminate in October with the publication of a research report offering practical recommendations to firms on how to navigate these issues. Our hope is that this will help ensure firms can make the most of the transformative potential of data and AI, while prioritising the customer’s best interests and safety.

Spotlight on Nationwide’s ‘Open Banking for Good’ Challenge

From a pool of 50 applicants, Nationwide Building Society have selected seven FinTech companies who will develop Open Banking based apps and services to help financially vulnerable people.

Ahead of Mental Health Awareness Week, we caught up with Bailey Kursar, CEO and Founder of Toucan, and Stuart Bungay co-Founder and CEO at Tully, about helping people experiencing mental health issues through open banking technology. Both Toucan and Tully were recently selected as finalists in the Open Banking for Good challenge, in the ‘Money Management & Help’ category.

What negative impacts can people’s finances have on their mental health?

Both Stuart and Bailey confirmed that our finances can directly impact on our mental health. According to Bailey, “We’re taught that if you can’t get a handle on your spending, you’re ‘lazy’, ‘reckless’ or ‘stupid’. One of the biggest things we can do to improve people’s lives is to improve their financial literacy.”

Stuart agreed: “Debts and the stress they cause can seriously impact a person’s mental and physical health. One in three people in the UK who seek support have mental issues such as anxiety.”

Why did your company choose to leverage Open Banking to address this?

Tully and Toucan are both using Open Banking technology to support and empower their vulnerable customers, but for quite different reasons.

Tully use Open Banking to reach users on their terms. Stuart explained, “We use Open Banking to allow people to seek help and advice in an environment where they feel comfortable. At Tully, we use Open Banking for a variety of functions, from building an individual’s budget based on actual transaction data, to supporting and coaching individuals to make their money go further each month.”

For Toucan, rate of innovation is more important. According to Bailey, “Legacy banks aren’t moving fast enough to build important new features that we’re focused on delivering – like third party notifications, designed to help those with bipolar disorder and similar conditions get support with their spending from a family member or friend. Open Banking enables apps like Toucan to use the data we need to deliver these new features without relying on legacy banking systems or processes.”

What are the benefits of using Open Banking for your company?

Both Tully and Toucan chose Open Banking to increase the functionality they can offer their end users. For Bailey, “Open Banking gives us the ability to build smart features around a customer’s spending data.”

And Stuart agrees: “Open Banking provides Tully with an accurate real-time view of how much a person can actually afford to repay on their debts. We then use real-time updates to support behaviour change over time, helping our customers achieve short term spending change to save towards longer-term goals.”

What are the benefits of using Open Banking for your customers?

Both Stuart and Bailey referenced the real, tangible improvements to how people can manage their money.

Stuart again emphasised availability: “Open Banking allows Tully’s customers to complete their budget and get the advice they need in their own time. Compared to the current industry standard, Open Banking provides a quicker and more accurate way of providing income and expenditure information, without having to guess or search through endless past bills and bank statements.”

And for Bailey, the benefits were even clearer: “Open Banking gives people a secure way to use their spending data in apps that aren’t controlled by their bank. Products like Toucan can then help them spend less, save more and get better deals.”

Thoughts on the future of FinTech in the arena of Mental Health

Much has been achieved to date, and FinTech applications continue to come online to empower vulnerable consumers with better access to a broader and more accessible range of financial products. However, for Bailey, there is still more to be done – and vigilance must be the industry’s watchword going forward.

“I think there are areas where fintech has to take more responsibility for the implications of the innovations we build. The way we spend, save and borrow money has changed so much in the last decade; inevitably there will be people who are left behind, or who start to feel overwhelmed. It’s now up to us to be more thoughtful in the way we build new products. There is a lot more we can do to prevent overspending or debt connected to mental ill health, and also to alleviate anxiety around money management.”