/retail banking

News and resources on retail banking, consumer finance and reinventing customer experience in finance.
Fintech founders accuse Starling's Boden of trying to stifle innovation

Fintech founders accuse Starling's Boden of trying to stifle innovation

Starling Bank chief Anne Boden has been accused by 53 fintech founders of trying to thwart innovation in financial services, following her comments to a Treasury Select Committe that Open Banking has failed to encourage bank account switching.

Boden told MPs in October that “Open Banking has not been a success", arguing that other measures would be best deployed to encourage customers to switch accounts.

Her comments have been met with disbelief by a coalition of fintech founders who co-signed a letter to MPs rejecting her views.

The letter, which was signed by a host of fintech luminaries, inclouding Giles Andrew of Zopa and Paul Taylor of Thought Machine among others, accuses Boden of making a "dramatic oversimplification of the proposition provided by Open Banking" in her presentation to the Committee.

Of Boden's claims that Open Banking has been a failure, the Fintech Founders group writes: "This is not our view, and we believe that this view is uncompetitive and typical of banks trying to thwart the future of innovation in financial services.

"Although the technology has only been live since November 2018, Open Banking has already led to the formation of a whole host of new start-ups, raising hundreds of millions of dollars in new venture capital investment. There are now over 2.5 million Open Banking payments a month, compared to just 320,000 in the whole of 2018. Whilst the implementation has been far from perfect, and there are challenges - but we are still in the early stages of the journey."

Boden hit back at the comments on Twitter, noting that 47 of the signatories were men and calling for a greater diversity in views on fintech innovation.

Comments: (11)

A Finextra member
A Finextra member 04 January, 2022, 12:172 likes 2 likes

Why are fintech people outraged at the comment 'Open Banking has failed'? It is true and a simple statement of fact.

Jeremy Light
Jeremy Light - pingNpay - London 04 January, 2022, 13:32Be the first to give this comment the thumbs up 0 likes

A lot of people (including me) thought contactless cards were a failure for at least the first five years after UK launch (2008). However, if you looked at transaction volumes they were consistently tripling each year and continued to do so, accounting now for > 60% of all UK card payments.

It is still early days for Open Banking payments, but adoption may be following a similar path to contactless cards, with recent monthly transaction volume quadrupling year-on-year (3m Nov 21 v 740k Nov 20 accoring to OBIE data).

As ever with payments, look for sustained exponential growth to spot successful new services and networks. Avoid linear thinking in these situations or risk being  wrongfooted, as many banks and retailers were with contactless (as recently as three years ago a major UK high street electronics retailer still had hand written "No contactless" signs on its POS tills).

My bet is that Open Banking payments will thrive.

However, for AIS services, the data tells a different story - AIS API calls are considerably higher than for payments but in Nov 21 were 8% below their peak in July 21. AIS Open Banking seems to have stalled - maybe Fintechs are struggling to find uses for AIS data but even so it is too early to write off AIS as a failure.


Dinesh Katyal
Dinesh Katyal - Financial Data Exchange - San Francisco Bay Area 05 January, 2022, 02:15Be the first to give this comment the thumbs up 0 likes

Hi Jeremy, Thanks for your thoughtful comment. Are you able to share the references for the data your shared regarding open banking?

Jeremy Light
Jeremy Light - pingNpay - London 05 January, 2022, 09:56Be the first to give this comment the thumbs up 0 likes

The OBIE Open Banking stats are available on https://www.openbanking.org.uk/api-performance/

The UK contactless cards stats used to be freely available but now they are consolidated under UK Finance I believe you need to be a member to get access to historical data https://www.ukfinance.org.uk/data-and-research/data

Sotiris Syrmakezis
Sotiris Syrmakezis - What If / Digital Transformation - Athens 05 January, 2022, 11:441 like 1 like

I agree with Anne that “other measures would be best deployed to encourage customers to switch accounts” but that doesn’t mean that open banking should be abandoned. On the contrary, it should be further supported and augmented with additional measures.

Stating that Open Banking is not a success is subjective. We all would like to see a much higher adoption but, even so, results are very promising. Open Banking is here to stay and it's a matter of time until we see it getting a substantial market share in payments.

One of the reasons for Open Banking’s smaller success is the resistance of incumbent banks who don’t want fintechs playing in their playgrounds. And this brings us to the fact that Starling is an ex-fintech startup, now a Bank-wannabe and this explains Anne’s position. Moreover, it’s usual for startups not wanting other startups in their own playgrounds.

I am an all-time admirer of Anne Boden, I underline her statement on diversity and I congratulate her for her perseverance and success so far.


Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 January, 2022, 15:481 like 1 like

The last time I checked, there were < 5M users of Open Banking in EU / UK. That does seem underwhelming when compared with 80M users of "Open Finance" in USA without any regulation in place. 

But success or failure must be judged vis à vis goals.   

Can anyone point to any source where success criteria of Open Banking has been published?

Melvin Haskins
Melvin Haskins - Haston International Limited - 05 January, 2022, 16:47Be the first to give this comment the thumbs up 0 likes

The US banking market is fragmented - less so today than before, but still fragmented. Open banking is a neccessity to cary out many transactions . The UK and Europe have been light years ahead in allowing such things as variable amount bill payment to be charged to your account without intervention - it has been availbe for 50 years in the UK. It is for these reasons that Open Banking has not taken off so fast and may not reach the levels reached in the US.

Vladimir Dimitroff
Vladimir Dimitroff - Senior Executives Forum - London 06 January, 2022, 00:31Be the first to give this comment the thumbs up 0 likes

This sounds like a Cancel Culture exercise - taking a phrase out of context, and attacking for the keyword 'failure'. As far as I read  in media reports, she apparently said that OB has "failed to enocurage bank account switching"... Where are those words in the woke accusers' attack???

Leave aside (for a moment) whether account switching was ever the top priority raison d'etre of Open Banking. (Neobanks, including Starling, can be excused for having such expectations). But said switching has not materialised in any significant numbers. Fact.

How does a statement of fact constitute the sin of 'stifling innovation'?!?

Open Banking was, indeed, a remarkable success in areas like account aggregation / single view / wallet type services, and by extension - in the emerging and important area of PFM (personal finance management), where a 360-drgeee visibility of all customer's activities, assets and liabilities adds significant value and this use case of OB is likely to continue growing.

There is limited but promising success in simplifying, automating and speeding up onboarding and account management with non-bank ('merchant') players like utilities and retailers. And a number of lesser areas with 'long tail' cumulative contribution to the thriving fintech sector.

But I haven't read about Ms Boden denying those success areas or suggesting better methods for stimulating their growth? She wanted people to switch their main bank (in particular - their salary destinatio account) from the high-street incumbents to the neobanks. Din't happenl sorry - but stating that fact is no crime to make such vicious noise about.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 07 January, 2022, 09:01Be the first to give this comment the thumbs up 0 likes

Good point @MelvinHaskins.

As I've said myself before, UK / EU have had A2A, PFM and many other usual OB suspects for a long time. Which begs the question, why bother with Open Banking at all?

I don't deny that most successful tech startups "merely" tech-mediate hitherto analog processes. But non-OB solutions already tech-mediated the UX well before OB entered the scene. Despite that, not too many of them have managed to go mainstream even after being around for 5-10 years. 

I know that OB has replaced scraping with API, thus making access to banking data more secure. But I'm not so sure if that adds so much consumer value proposition that it will enable A2A, PFM and other OB-based products to overcome the adoption challenges faced by equivalent non-OB products.

A Finextra member
A Finextra member 07 January, 2022, 09:09Be the first to give this comment the thumbs up 0 likes

The key question is: Why do people not switch bank accounts to fintech driven new players? -Due to tech issues with the new players? -Due to being pleased with the service, stability and trust in multiple areas supplied by the "incumbents" ? Not good enough to switch to - could be one conclusion.  Interesting to look into fintech driven payment initiation and which kind of payments are predominant? Will we find gambling, trading in crypto assets, money-send to third world countries with insufficient aml controls, high-risk e comm payments, to be more present than in "incumbent" bank payment services? I.e. are the PISP:s serving areas that the "incumbents" do not want to serve? Regulation many times gives unexpected outcome - is the case with open banking?  


Richard Kalas
Richard Kalas - GFT Group - London 10 January, 2022, 09:22Be the first to give this comment the thumbs up 0 likes

Open Banking, as a UK regulatory mandate, may perhaps fall short of initial expectation. It is unjust to label it a failure. It was known in advance that additional friction would make it less attractive than incumbent methods for payments. And, whilst SCA sought to level the field, its implementation was necessarily extended due to other tech priorities on banks as a result of the Covid pandemic. Interestingly, an increase in payment use through open banking, prior to full rollout of SCA, indicates consumers are accepting of it despite current flaws.

Open banking as a concept for the industry has evolved into open finance and this continues to garner the interest of a wider section of the financial services industry. This will undoubtedly foster further innovation and competition in the banking sector and in turn it will exceed the original intentions of Open Banking.