26 April 2019

UK Finance: Open banking innovation

The development of ‘open banking’ across the UK and EU is arguably one of the most revolutionary events within financial services in recent times. The UK has been at the forefront of developments, through the work of the Open Banking Implementation Entity (OBIE) which was set up to deliver key consumer benefits of PSD2 and open banking more generally.

The OBIE has delivered a whole series of standards and a number of other key tools under implementation by the industry that promise to enable customers to benefit from a wider set of services than has been possible in the past.

On 25 March 2019, in collaboration with Addleshaw Goddard and the OBIE, UK Finance hosted an industry event where the benefits that may be gained from the deployment of standardised information sources across the industry had been considered. In the past customers were limited to the access that their account provider was able to grant them through online banking solutions. However, with the development of open Application Programming Interfaces (APIs), other financial service providers can be given permission to use this data and provide additional services to their customers. This could include services such as being able to view balances and account details from multiple providers in a single application or managing payments from multiple accounts in one easy to use interface.

At the event UK Finance invited participants to consider the ways that the standards will enable vulnerable customers to be better protected as they navigate the complexities of financial products, as well as how businesses could be served by the new standards. From debt counselling services to enhanced remittance services, the wealth of ideas that the attendees proposed demonstrates the breadth and depth of possibilities that might arise from the widescale development of these standardised information sources.

In order for these benefits to be realised, the industry still needs to deploy these standardised information sources. UK Finance welcomed Maha El Dimachki, Head of Payments Supervision at the Financial Conduct Authority (FCA), to discuss the way in which the FCA is helping the industry reach this technological ubiquity. Key to this discussion was the way in which the FCA is allowing firms to benefit from the exemption to provide a fall-back option to these standardised information sources, as required under PSD2. Enabling firms to gain this exemption is a key part of making sure that the widespread adoption of a common standard is possible for the industry. It is also essential to ensuring that customers will ultimately benefit from the wide variety of new services.

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