CMA announcement signals that UK can lead the world in banking
The Open Data Institute (ODI) welcomes the Competition and Markets Authority's final report, launched today: making banks work harder for you.
Gavin Starks, CEO at the ODI said:
The UK has the opportunity to lead the world in open innovation in banking, as shown in the CMA’s report. The future of the sector, and the development of the best possible consumer services, will depend on the involvement of startups, fintech and consumer organisations, as well as the big banks in order for this to happen.
The creation of open APIs will lead to the development of a strong, open marketplace for app development. Building on the Open Banking Standard will create the best market conditions for open innovation.
Open banking is a crucial part of building the UK’s data infrastructure: the fundamental data framework that will increase interoperability and collaboration, efficiency and productivity in public and private sectors, nationally and internationally.
Last week the ODI launched Open Banking Development Group (OBDG), welcomed by the nine largest UK banks and the Scaleup Institute, to drive open innovation around an Open Banking Standard, on a UK and international basis. It is calling on all individuals and organisations with an interest in the future of the banking sector to join the conversation.
The ‘remedies’ put forward in the report draw directly on the work of the Open Banking Working Group (OBWG), set up in 2015 by the Treasury and co-chaired by the ODI. In particular, the recommended API will use the Open Banking Standard framework, developed by the OBWG. This will enable new customer-facing apps and services to be developed, helping consumers to share data securely and make better decisions about the banking products they use, and how they interact with banks.
Benefits for consumers, banks and businesses
When securely shared or published openly using open APIs, data can be used to build apps and services which help people quickly find what they need. For example, customers can look for a mortgage more easily, banks can find customers matched to a new product, and businesses can share data with their accountants. People will be able to choose services that are better, cheaper and simpler than those they were limited to before.
Open banking also offers huge financial value for the banks and fintech companies as they become more efficient in their interactions and, in turn, are able to offer customers what they need, when they need it.
Gavin Starks said:
Building trust, increasing efficiency and open innovation in the banking sector can only be achieved when the banks, startups, consumer groups, and regulators work together. The Open Banking Development Group (OBDG) aims to do exactly that.
Edward Twiddy, Chief Innovation Officer at Atom Bank, said:
Open banking has its roots in international efforts across Europe to improve transparency and promote choice for consumers. It’s good to see the CMA come out in favour of retaining momentum and pace in the transformation of retail banking in this respect, and Atom will remain fully engaged with the government and the rest of the industry – including through the Open Banking Development Group - to press for these changes to happen as quickly as possible. However Atom is disappointed that the CMA recommends the change be lead by the incumbent high street banks when the future of banking competition lies elsewhere.
For more information about the Open Banking Development Group, to become a patron, sponsor or member, please contact [email protected].