20/06/2020 by Future of Finance 1 Comment
FROM OPEN BANKING TO OPEN FINANCE
A FUTURE OF FINANCE WEBINAR WITH BANKERS, ASSET MANAGERS, WEALTH MANAGERS, INSURERS AND FINTECHS
Monday 27 July 2020 2.00-3.00 pm UK time
No country in Europe has taken the possibilities of the Open Banking revolution more seriously than the United Kingdom. The Financial Conduct Authority (FCA), excited by the opportunity to improve services for retail consumers and SMEs through competition-led innovation, has approved 231 firms as Open Banking service providers. Impressed by the surge of innovative FinTechs developing novel services, the FCA is extending the experiment to savings, mortgages and insurance. That means the impact of competition and innovation will be felt throughout the industry, creating new threats for incumbents and new opportunities for firms prepared to change. At this Future of Finance event, panellists will ask what sorts of firm can cut costs and improve for consumers and SMEs while increasing profits for themselves.
Sam Seaton, CEO of MoneyHub Entreprise https://www.linkedin.com/in/samanthaseaton/
Gavin Littlejohn, Chairman of FDATA Global https://www.linkedin.com/in/gavin-littlejohn-1a8b3...
Rune Mai, CEO and Founder of Nordic API Gateway https://www.linkedin.com/in/runemai/
The second iteration of the Payment Services Directive (PSD2) came into effect in January 2018. By enabling retail and small business customers to oblige banks providing them with current accounts, credit cards and on-line banking services to share account information with third parties and allow those third parties to make payments on their behalf, it was potentially revolutionary. More than two years on, its principal objective – to foster competition by making it easier to switch providers - is partially achieved. Even in the United Kingdom, which has pursued open banking more aggressively than other European countries - the nine biggest banks were obliged to develop an open banking standard for accessing current accounts and forced to give third parties access to payment accounts on-line - it took until the beginning of this year for the number of customers exercising this right to clear one million. Although the Open Banking Implementation Entity (OBIE) records 231 regulated providers enrolled and able to provide Open Banking services, just 71 “have at least one proposition live with customers.” In terms of innovation, Open Banking has had a more visible impact. It encouraged the Investment and Saving Alliance (Tisa) to develop APIs for savings products. It has also helped to spawn a range of new services including account aggregation apps (such as ING-owned Yolt), credit ratings for tenants (Canopy) and SMEs (Wiserfunding), anti-fraud technologies for older people (Kalgera), mortgage comparison sites (such as Mojo), “round-up” and variable charitable donation tools (Sustainably.co), digital lending-as-a-service platforms (TradeLedger), and chatbot personal financial advisers (Cleo). Firms such as these help to account for the doubling in the number of regulated providers of open banking services since 2018. In fact, the United Kingdom financial markets regulator, the Financial Conduct Authority (FCA), has approved 135 new service providers since the launch of Open Banking. The FCA is sufficiently encouraged by the evidence of innovation to want to extend the concept to other areas of finance, such as mortgages, savings accounts, pensions, consumer credit, insurance and investments. Shortly before Christmas 2019, it issued a publication entitled Call for Input: Open Finance, inviting banks, insurers and asset managers as well as consumers and FinTechs to share ideas on how to accelerate the growth and widen the impact of Open Banking. As with the operational resilience consultation, the deadline for responses to the Call for Input was extended from March to 1 October 2020 So our webinar this summer provides a timely opportunity for bankers, asset managers, wealth managers, insurers and FinTechs to consider the opportunities and risks of Open Finance.
- Barriers to entry by FinTechs
- Need for regulatory intervention
- Security of personal data
- Potential for mis-use of data
- Readiness of consumers to control their data and finances
- Quality of financial advice
- Necessary investment in new technology
- Data formats
- Standards to foster inter-operability
- Regulatory obligations of new entrants
- Impact of open banking on credit card networks
- Possible impact of open finance on asset managers, wealth managers and insurers
- Benefits for consumers so far (e.g. consumer credit)
- How soon will we see financial management dashboards?
- Benefits for SMEs so far
- Partnerships between incumbent banks and FinTechs
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