Last week saw HM Treasury issue a report created by the Open Banking Working Group (OBWG), proposing to create an open banking API system to encourage innovation and more competition in the industry, for both businesses and consumers.
Dave Tonge, the CTO of Moneyhub, helped shape the report through his work with FData, and he believes there are five key take-outs that everyone working in FinTech should be aware of.
Dave explained, “With the successful implementation of the proposed framework, it should first of all create more competition and transparent deals. Banks will be required to release product information in a standardised format making it possible for the first time, to truly compare current accounts without all the variables.
“Secondly, the proposed new system will help to empower consumers. Through greater control and access to their finances, consumers will finally be able to have everything under one roof. Gone will be the days of forgetting about an old savings account; in this new world order it will be easier for consumers to see what they own and what they owe.
“Financial capability will also be at our finger tips. Banking data and information will be able to seamlessly pass through to new services to help consumers better understand what’s going on in their finances without needing to be a financial expert.
“A potentially significant outcome, particularly for low-income households, will also be the reduced cost of living. Through this innovation, the customer will be able to pay for things online directly without using a merchant, which should save money across weekly shopping bills and daily living expenses.
“And finally, what’s perhaps the most exciting part of the report is not the immediate effects but the huge potential it opens up. There will be unforeseen benefits from this for consumers across the world; it’s the catalyst for innovation.
“This report confirms that we are on the cusp of significant change in the banking industry. As George Osborne set out in his Autumn statement in 2014, the government has aspirations to see London and the UK as a global FinTech hub, which we fully support.
“I am incredibly proud of what we’ve achieved to date with the OBWG, but sadly the timeframes outlaid in the report aren’t aligned with our aspirations. In order to be FinTech world leaders, the time to act is now and the U.K. must act fast.”