Following news of the Marriott data breach, panelists at Fintech Connect 2018 believe that while concern about the security of data retention still exists, open APIs have resulted in a paradigm shift around how data is controlled.
Jon Roughley, director of innovation and strategy UK&I at Experian, explained that although it has “taken a lot of internal pain, data should not be trapped and consumers are now understanding that their personal information should be theirs to be used freely”.
However, other pain points exist around how different countries have introduced open banking and Mark Curran, director of payments and open banking at CYBG PLC, drew parallels between this and how travelers require different plug types when visiting different regions.
Barclays’ head of international cash management products Ravindra Madduri explained this further and said that while regulation has pushed open banking in the UK and Europe, fintechs have driven this openness in North America and in Asia, where the change has been more solution-led.
Roland Fejfar, executive director – financial technology IBD at Morgan Stanley joined the chorus and reiterated that open banking is not about technology, but it is about adoption. “Regulation has forced adoption and has enabled free flow. For customer value to be generated, innovation still needs to happen and the customer decides what is good innovation.”
In the age of large scale data breaches such as Marriott, Facebook and Cambridge Analytica, European companies are required to report hacks and consumers are now more aware of the problems that these third parties have experienced and are increasingly concerned about what their data may be used for.
Fejfar points to research indicating that 72% of people in UK are not aware of open banking as a concept and of those who are aware, 77% would not share the data with anyone other than their bank. Fejfar added that it is a matter of education and when new services are opened, customers should be informed about what is happening.
Raghav Krishna, product owner at Lloyds Banking Group, joined the discussion by saying that while regulation is introducing innovation, “there is still more work to be done in how it is controlled.” Referencing the British Airways “fiasco”, he said that regulation will evolve how third parties keep data secure, because weak players in the industry can “destroy trust” for the stronger and larger institutions.
Moderating the panel session, Warwick Business School’s Dr. Markos Zachariadis revealed that he suspects that there may be a big bank that experiences a data breach in the next five to ten years and this may open up a “white space” for new companies to act as trusted parties that would own consumer data and would then passport it to different providers.