Consumers ‘don’t care about Open Banking’
Written by Peter Walker
The term Open Banking has become overused in the industry and customers don’t know or care about it, according to Nationwide’s head of transformation.
Speaking as part of a panel at the FinTech Connect conference, Matt Perks argued that the problem is not about educating people about the changes which force banks to share personal data, “but developing the compelling products and services that convince them of the value of giving over their data”.
Peter Smith, director at Seneca Investment Managers and global head of policy liaison for the Tax Incentivised Savings Association, commented that the roll-out of Open Banking has mostly been about payments innovation so far.
“The next step is the disintermediation of banks' product verticals, trying to innovate things like ISAs or pensions,” he added.
Boring Money’s head of RegTech Amina Ahmad said she hoped the advent of the EU’s second payment service directive (PSD2) brought unintended structural changes. “Hopefully it reminds us who we’re making products for and banks become a bit more like retailers – removing complexity and fulfilling customers needs.”
The panel also discussed how PSD2 complemented or conflicted with 2018’s other big regulatory change, the General Data Protection Regulation (GDPR).
Smith pointed out the conflicts between them, and MiFID II rules, calling for more work to mutualise their currently disparate aims. However, Perks was more positive, suggesting synergies between the GDPR that has been “fantastic” for empowering people to take control over their data, and PSD2 which is opening up the accessibility to that data.
Ed Johnson-Williams, policy and research officer at the Open Rights Group, said that after looking into finance industry approaches to data consent notices, there’s still work to be done in order to avoid any sense of information manipulation.
“Businesses must be more upfront and explain what they’re going to do with your information, it seems to me that would give a competitive advantage. Also, we would like to see more consistency across the industry on consent notices, as that enables consumer comparison.”
Perks concluded by stating that most big banks are still tied up complying with the Open Banking regulations, but by this time next year there should be a lot more self-determination. “The orders the CMA9 were under originally were incredibly prescriptive, but eventually competition will drive things forward.”