Business banking platform Tide has accused the UK's banks of dragging their feet on Open Banking, arguing for the introduction of data fees to incentivise the sector to promote wider uptake.
In a submission to the Competition and Markets Authority review into governance arrangement for the new entity to take over from the Open Banking Implementation Entity (OBIE), Tide proposes removing the block on charging to access data imposed by EU legislation and thus creating a new market for paid-for premium data access services for large financial institutions.
Oliver Prill, Tide CEO says that the “slow uptake of Open Banking” has meant missed opportunities for both customers and companies who might have created new products and services. According to the recent OBIE Annual Report, only three million UK customers and businesses are using Open Banking-enabled products at the start of 2021, and account switching still remains low.
“The slow uptake is the result, at least in part, of foot-dragging by some of the large financial institutions, who may have perceived Open Banking as more of a threat than an opportunity," says Prill. "It certainly was an unwelcome cost to some of them.”
An FCA report into a consultation on the expansion of Open Banking to more banking services published yesterday, found that bank respondents were mostly concerned about the cost implications, having spent more than anticipated on meeting initial regulatory demands
He believes that banks need to be encouraged to see Open Banking more as a money-making business opportunity than a burdensome cost centre driving customers to other providers.
"Now that Open Banking is established, at least at a basic level, we believe its true potential is only likely to be realised if the high street banks are positively incentivised to participate," he says. "We believe there is a whole level of data that the large institutions could make available to companies like Tide, for a modest fee, which would allow us and others to create a raft of new and innovative products and services for our members. Such premium services could be offered in addition to the basic free Open Banking access."