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UK account switching just empowers people to switch accounts. It doesn't spell out the benefit of doing so. It does not carry out the switch for them. People evaluate the switch at high level and conclude that all banks are the same. At the high level, they're right. So the benefit of switching is negligible. The effort involved in making the switch is not negligible. Ergo cost exceeds benefit and UK account switching has met with lukewarm reception.

OTOH, PFM goes a little deeper and makes a recommendation to switch only if the benefit of switching is significant for the given consumer. By executing the switch automatically, PFM eliminates the cost of switching. Ergo benefit exceeds cost and switch is more likely to happen.

As things stand, benefit of switching could be significant for credit card, mortgage and other banking products. Admittedly, they're negligible for a basic checking account. But that's only if you restrict the field to the legacy banks. If you thrown in the challenger banks, the situation may change, especially if the ones in UK / Europe take some tips from their counterparts in India on how to become more aggressive by negotiating better funding and valuation terms with VCs.

I don't know about boo.com but, from what I've observed, virtually every unicorn / decacorn has reached where it has by following the same playbook. 

@AnonFinextraMember:

No, you're not missing anything here. According to the prevailing playbook of unicorns / decacorns - at least in USA and India, to name two markets - investor does pick up the VC-funded company's operating costs and the company does make whopping losses e.g. PayTM, Uber, WeWork, et al. The investor becomes the business, which is highly sustainable when measured by standard parameters of a business. The company becomes an asset class measured by different parameters on which it is highly sustainable. More in my blog posts titled When A Business Is VC Funded, VC Is The Business and If You Think VCs Create Bubbles, Meet ICOs (hyperlinks removed to comply with Finextra Community Rules but these posts should appear on top of Google Search results when searched by their titles).

With EU debit interchange at 0.5%, what's Monzo really complaining about? Some of these European fintechs should get coached by their Indian counterparts how to negotiate more funding and rising valuation with VC / PE community. India's largest mobile wallet cum payments bank PayTM lets you top up any amount of money free of cost even via credit card @ 2-3% MDR. It still doesn't charge any fees to merchants for collecting payments. It makes whopping losses. Still it keeps raising more and more funds at increasing valuations from one round to another. At the last raise, I believe it was valued at $8B (Source).

With my similar background, I totally agree with your post. Let me add a few more tips to fintechs:

* Don't claim that your product is totally unique (even if it is). While selling to banks and FIs, it helps to put your product into preexisting cubbyholes.

* Even if you have no competitors, invent some. According to their well-established procurement processes, mainstream buyers - especially in FinServ - can't buy anything unless they get three quotations for it.

* Emphasize value over price. In my over two decades of selling to finserv, I can't think of a single bank or FI - not even public sector ones - that has bought solely because of "L1".

* Sell to aspirations. I wrote an entire blog post on this. Aspirational Selling Is Not Overselling

Those who provide true value proposition - banks and fintechs alike - will be the winners. But they don't need Open Banking for that. Innovative Fintechs Don’t Need No PSD2 Regulation.

All of these are valid, if somewhat old and operational, techniques for boosting ecommerce conversion rates. These days, ecommerce companies are taking size of target audience and conversion rates to a wholly new level by supporting deferred payment, installment payment and other brand new modes of payment e.g. Affirm, Klarna.

Not really @RobertJarvis, at least not for USA, for which I have figures readily.

If you look at chart at the end of my post How To Really Kill Cash, CIC figures for USA are:

2005: $0.75T 

2012: $1.15T

2015: $1.38T

CAGR in Last 10 years is 6.29% and CAGR in Last 3 years is 6.27% i.e. are both ~6.3%.

Ergo no difference in CIC growth over last 10 or last 3 years.

The vision / rationale of PSD2 / Open Banking is that (1) There's a lot of value in customer's banking data (2) Banks are doing nothing with that data (3) Customers are deprived of all the insights they can gain from their data (4) Ergo customer's banking data should be thrown open to third-parties to mine and generate insights that are useful to customers. 

Going by this, customers should be clamoring for PSD2 products and services and creating tremendous buzz for them, thus providing viral distribution of these offerings.

If this is not happening and if a huge public education campaign is required to just create awareness of PSD2, then the basic premise of PSD2 becomes somewhat questionable. Forget anti-climax, PSD2 offerings would be Dead on Arrival.

@JamesPiggot:

Valid question. In fact, I think the boardroom IS demanding - and going ahead - with digitalization. While I alluded solely to the CIO org. in my previous comment, on second thoughts, I think the vendor community - to which I belong - is equally well to blame for "Shadow IT". 

The case of a private sector bank in India comes to mind. A couple of years ago, the boardroom wanted to launch an instant account opening portal that would enable online opening of a bank account in a few minutes. Business asked IT to execute the project. IT consulted the incumbent CBS vendor and came back with a $M cost and 6 months delivery period. Neither the cost nor the timeline matched the boardroom's vision of getting something up and running within their perceived time window of 4-6 weeks (after which they thought competition would catch up). Did they give up after seeing IT's estimate? No. They gave a chance to a small web development company that had been knocking on their doors for months.

Long story short, the instant account opening portal was launched in 8 weeks for a cost a couple of $100K. Apart from a couple of CBS services that IT was involved in exposing to the new portal, this was a classic example of Shadow IT in action.