UK fintech sector eager to embrace Open Banking

UK fintech sector eager to embrace Open Banking

UK fintech firms are working hard to make the most of the Open Banking era, according to a survey from EY which shows that the vast majority are actively getting ready to take advantage of the slew of customer data that is being opened up to them.

EY quizzed 31 UK fintechs that have raised about £500 million between them for the survey, finding that 94% see Open Banking as a major area of opportunity.

With this in mind, 81% are getting ready and 29% say that they are already fully prepared, with almost a third of survey participants claiming to have teams of 10-plus working on Open Banking projects.

Resourcing talent is only the fourth biggest challenge cited by respondents, behind customer adoption, identifying which propositions to invest in, and actually developing the products. More than three quarters are building new propositions, with 23% prioritising account and/or data aggregation.

Meanwhile, 59% of participants see Open Banking as an opportunity to review their collaboration strategies - something that could see them looking outside the financial services sector, with three-quarters believing that new competitors such as tech firms will become increasingly important over time.

Hamish Thomas, Open Banking and payments leader, EY, says: "Such a significant initiative naturally means that many FinTechs are re-looking at their strategies and analysing which types of companies could be potential partners in the future.

"However, whether it’ll be other emerging FinTechs, more established banks, technology companies, or a combination of these, it will be fascinating to see what new products and/or services are launched over the coming months and years, which will transform our daily financial lives."

Comments: (4)

Melvin Haskins
Melvin Haskins - Haston International Limited - 22 March, 2018, 09:44Be the first to give this comment the thumbs up 0 likes

I'm certain that every fintech company is salivating at the money to be made from Open Banking. However, it is yet to be shown whether Joe Public will adopt it.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 22 March, 2018, 09:551 like 1 like

The Facebook-Cambridge Analytica fracas is a big threat to mainstream adoption of Open Banking. If self-proclaimed tech company Facebook can’t ensure that third party apps comply with its own rules for data usage, how will banks that merely "want to be a tech company” ensure that third party fintech apps comply with third party Open Banking rules for data usage?

Daoud Fakhri
Daoud Fakhri - GlobalData - London 22 March, 2018, 10:51Be the first to give this comment the thumbs up 0 likes

Customer adoption will definiteloy be an issue. Most consumers are completely unaware of open banking, and many surveys have indicated consumer reticence to share data. The current allegations around Cambridge Analytica's misuse of customer data from Facebook will doubtless make consumers even more reluctant to share their banking data with TPPs.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 23 March, 2018, 12:36Be the first to give this comment the thumbs up 0 likes

In his blog post of yesterday, Mark Zuckerberg listed the steps Facebook is taking in order to prevent another Cambridge Analytica-type of misuse of data from happening in future e.g. automatically block off data to 3rd party apps not used by users for 3 months or more. Curious to know how Open Banking founding organization proposes to prevent a CA-type of misuse from happening with banking data sourced under the provisions of PSD2 / Open Banking. As I've said before, banks are not up to this task.