Emma Steeley, CEO, AccountScore

2019 is the year Open Banking goes back to the future

Over the last few months, I’ve seen and heard a lot of stories in the press about how the Open Banking revolution is yet to come, or, more cynically, is never going to come; at least not in the way imagined.

It’s an interesting view.

When PSD2 took effect a little over a year ago, there was an expectation that a whole new era of bank innovation would sweep the market and the entire retail banking sector would be turned on its head overnight.

The nay-sayer’s view, therefore, is that because there hasn’t been a sudden tidal wave of change, the Open Banking revolution hasn’t happened, isn’t happening, or possibly won’t happen.

The reality is, while many are sitting and wondering when the Open Banking revolution will actually come, they’re actually missing the fact that it’s already happening.

It’s worth pointing out that the purpose of the reforms was not to completely change the way everybody banked and interacted with financial institutions on a daily basis. Unlike when everyone in the UK switched from signing for card payments to entering a four digit pin, the Competition and Market Authority’s objective with the reforms was to help open the market and drive competition and innovation, as well as give consumers the option and ability to save money, make better financial choices and lead to greater financial empowerment.

The tech, the actual systems that allow Open Banking, are the technical rails that are allowing these changes. In the same way that consumers don’t talk about 3-D secure all the time, there’s not a lot of interesting conversation to be had about Open Banking itself.

However, what is interesting, and where the revolution is happening, is where new ground is already being broken when it comes to financial enablement and the benefits that Open Banking technology can have for consumers.

Last year we provided the architecture to allow HSBC to create the first live use case by a tier-one bank to make a lending decision through Open Banking, and onboarded over a further 40 banking and alternative lending clients onto our Open Banking platform.

These offerings are now being expanded into use cases across their portfolio of products and business. Examples include M&S Bank becoming the first lender to offer an Open Banking enabled mortgage journey in the UK, and First Direct Bank being the first provider to use Open Banking across all of their unsecured products, including personal loans and credit cards as well as overdraft applications.

The technology was also used for the first Open Banking ID verification tool in the world, going significantly further than the basic requirements of Strong Customer Authentication required under PSD2. By integrating our online platform consents.online with Equifax’s Bank Account Verifier, lenders and AISPs can match individuals to their bank account in real time. And because the Bank Account Verifier has extensive coverage of all types of UK bank accounts and checks the device and the fraud data bases, it’s able to add an extra measure of validation to provide robust security.

We also launched the first Open Banking solution for the debt advice and debt solutions sector, working with The Insolvency Panel to allow the financially vulnerable to share their data with financial institutions, securely avoiding repeated and lengthy processes to provide their full income and expenditure over the phone.

I’d say that’s all pretty revolutionary.

And it’s offerings like this, being developed across different financial institutions and other sectors through the application of technology, that the revolution is actually all about.

It’s here. It’s happening. And so, in reality it’s only now a matter time until people stop questioning when the revolution will actually come, but wonder how they missed it.