Consumer education, awareness & incentive remain vital to success
Two years on from the CMA market review which initiated Open Banking, Jake Ranson, banking and financial institution expert and CMO at Equifax Ltd, anticipates profound long term impact:
“Open Banking was established to encourage competition. It’s well known that current account switching remains low, but this doesn’t reflect the full story. The initiative has been a wake-up call for traditional banks to improve their understanding of their customers and tailor services to their needs. Consumers won’t necessarily have to switch to experience improvements in their banking services.
“Since inception two years ago, Open Banking has prompted exciting and much needed product developments to facilitate faster and more effective banking services for consumers. Many providers have applied for Open Banking regulatory permissions, showing the huge appetite to offer new and improved services.
“The services that will really take off are the ones that give consumers transparency, control and save them valuable time. Consumers need a compelling reason to share their data, whether it’s faster lending decisions or the ability to access financial products better suited to their needs, and providers must articulate the value clearly in order to succeed.
“The potential next steps are vast. We could see services that go beyond banking data, encompassing for example social media information so that consumers can manage their data in one place to gain easier access to tailored services. More and more companies are likely to get involved, potentially including players as varied as online estate agents and debt management companies.
“Momentum is building but there’s still a need to educate consumers on how Open Banking can improve their financial lives. Equally important is reassurance that they maintain control of their data, it will only be used with their permission and they can revoke access at any time.”