Rochelle Sharpe, product owner, payments at Allica Bank has said that the organisation is “waiting on the sidelines” when it comes to Open Finance due to unclear regulation.

Speaking at the Open Banking Expo in London on Tuesday, Sharpe said that regulation needs to be "really clear" in order for the bank to work towards certain use cases that rely on expanded data-sharing as part of the next iteration of Open Banking.

Open Finance aims to extend the remit of Open Banking, which is limited to payments, current accounts, and credit applications, to areas such as mortgages, pensions, investments and savings, while applying the same data sharing principles – smart data – to other key sectors like utilities and energy.

"The regulations have to be really clear for us to want to work towards it," Sharpe told delegates. “We’re only going to do something if we think its powerful and fast."

London-headquartered Allica Bank, which was founded 2019, is a digital challenger bank serving SME customers. Its clients are businesses with between five and 250 employees.

Last year, the bank was named the UK's number 1 fastest-growing private company in The Sunday Times 100.

At the event, Sharpe also highlighted some of the data challenges facing the market, explaining that while having more data is “fantastic”, its value and success depends on how it is used, adding that clearer regulation is necessary to optimise its use.

While existing rules support services such as credit lending, she said that higher risk lending can’t use open data as it’s “just not there in the regulation yet”, so it is difficult for the company to explore this area.

She also said that for the SME market, Open Banking is often seen as quite scary, with some businesses fearful that if they are rejected for a loan at one bank, they will be rejected elsewhere because their data is "everywhere".

Sharpe told the audience that it is important to identify how to educate a new generation of businesses to get them past this fear-driven barrier.

"We can make better products but actually we need to give customers information on how to use them," she continued.

While SMEs love having more data, and expect it to be delivered to them quickly and easily, she said, they also want to know how it gets to them because "trust is really big here".

Sharpe's comments come after Allica announced in April plans to roll out Open Banking-powered top-ups for UK SME current accounts.

Through its partnership with the Open Banking infrastructure platform Yapily, instead of manually authorising and transferring funds between apps and accounts, Allica's business owner customers can log into their current account, select the amount they want to top-up, and authorise the payment in a few clicks.

Companies can then keep this money for their day-to-day spending in their Allica current account, or transfer it into their instant-access Savings Pot.

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