Open Banking could realise £18 billion in value for British people and small businesses over the course of a year, claims an independent report, but only if the industry, government and regulators act to ensure the project realises its potential.
Put together by the Open Banking Implementation Entity's independent consumer and small business representatives, the report argues that Open Banking can usher in an era of more tailored and better value financial services.
People could gain £12 billion a year through the project, with businesses realising a further £6 billion in value. Overstretched people could save as much as £287 per year, 2.5% of their annual income.
But, say the authors, many of the most valuable Open Banking-enabled propositions are not yet available to consumers and there are a range of barriers which prevent these services coming to market today.
Even where services are available, the past scandals of PPI mis-selling combined with tech giants’ questionable use of data makes consumers wary about who they can trust. They want to know that firms are acting with their best interests at heart in a way that is ethical and responsible.
The report - which has been welcomed by the OBIE - makes recommendation to deliver greater value for consumers, build a trustworthy ecosystem, and stimulate the market to action quicker. Central to all of this is co-ordinated action by government and regulators to create a more holistic regulatory regime for data sharing.
Faith Reynolds, independent consumer representative, says: "Managing money is at best a distraction and at worst stressful and anxiety-inducing. Open Banking offers a golden opportunity to reimagine consumers’ relationship with financial services.
"What’s needed now is co-ordinated action and purpose to set the industry on the right trajectory to deliver a data-driven financial system which stops detriment occurring and instead improves UK citizens’ financial health and the productivity of small businesses.”
Mark Chidley, independent SME representative, adds: "Open Banking-enabled products can take the drudgery and guesswork out of running a business. It can also help the UK’s small businesses get better deals, make their money work harder and access the banking products they need more effectively. The effect on UK plc could be transformational."
Read the full report