Unlocking customer innovation with Open Banking

Last month techUK and the Open Banking Implementation Entity (OBIE) hosted a webinar showcasing what Open Banking (OB) can offer to customers and how companies can leverage the technology and OB framework to gain a competitive advantage. 

From demos to panel discussion, speakers highlighted how far the industry has come to deliver seamless app-to-app connection and secure authentication as well as new opportunities to explore. We thank the following experts for sharing their insights: 

• Chair of the event: Louise Beaumont - Chair of techUK’s Open Banking & Payments Working Group 
• Chris Michael - Head of Technology at OBIE 
• Holly Coventry - Product Director, Payment Innovation, Global Merchant and Network Services at American Express 
• Mounir Mouawad - Head of Product Strategy and Ops EMEA at Google Pay 
• Jack Crabtree - FinTech Engagement Leader EMEA at Yodlee 
• Faith Reynolds - Independent Consumer Representative for OBIE 

Open Banking powered customer journeys: demos

Chris Michael provided background on the development of the Open Banking powered customer experience. There used to be a lot of friction when it came to authentication as well as app-to-app connection.  

The first iteration of OB standards and development of application programming interfaces (APIs) a few years ago was not seamless; for example, customers were not allowed to use their mobile banking app to give access to third party providers.  

In the UK, customer experience guidelines and operational guidelines were developed to define what banks should do in terms of authentication as well as benchmarks for performance. 

This resulted in a step-change for the quality of APIs and a positive journey, particularly with app-to-app connections, allowing a third-party provider (TPP) to redirect a customer to their online banking app to authenticate with biometrics. 

Today, more than 1 million customers have used Open Banking in the UK and more than 3 billion API calls have been made. 

Account information services – Quickbooks connecting to Tide 

Payment initiation services – American Express 

Innovation in financial services: leaving no one behind 

Beyond customer journey and authentication, Open Banking innovation has the potential to help people manage better their money and access better services. With COVID-19 having a significant economic and social impact, the industry has to come up with new ways to reach customers and develop services. 

All customers should be at the heart of product development. Faith Reynolds explained that there are many segments of the population who need better access to personalised services. Since May, 63% of households are struggling or on the verge of struggling – including 11% of household in serious financial difficulties. 

Those segments of population could really benefit from digital finance innovation, including Open Banking powered services. There is a strong incentive and case here to develop products and tools for those customers and to find the best way to reach out to them, to bring sophisticated products that are going to materially change the value people get from financial services. 

Jack Crabtree highlighted that in the US about 40% of the population cannot afford a $400 dollars expense without going to credit. The issues and challenges are significant and require attention. Having big players and brands such as American Express delivering OB products is really helping to build consumer trust, so customers engage more with the innovation developed by the ecosystem. 

Bringing innovation and choice to customers 

Holly Coventry detailed how the connection across CMA9 banks enable the development of a new payment product available to over 85% of retail accounts in the UK, giving merchants and consumers the choice of how they pay, wherever they are. American Express’ Pay with Bank transfer product facilitates simple, speedy and secure payments directly from a customer's bank account to the merchant.  

With this new payment product – depending on the banks that consumers ultimately pay with, customers can see their balance before making a payment. This is really useful given the issues, as noted by Faith Reynolds, with customers being pressured to go through check out as fast as possible but needing to take the time to make sure they have the money in their account. 

Mounir Mouawad explained how Google is involved in the conversation and considering how and when the company could develop Open Banking products. It could help customers access financial services in a smarter way and access a better choice of services, rather than sticking with a current product or company. 

Going forward there are many routes for Open Banking to evolve, integrating pensions, mortgages, and data from other sectors such as energy and telecommunications. Global standards for security and data mobility also need to be more aligned and a movement towards more common international ground.