A genuine tale of innovative success risks stagnating as global imitators push adoption harder
FT confirms my thinking that Open Banking remains a solution looking for a problem.
Britain successfully produced an infrastructure solution with common API’s and associated regulatory framework in support.
The missing element was and remains the customer.
HELEN THOMAS
It’s surprising really that we don’t hear more about open banking from a government desperate for signs of world-beating regulatory prowess. It is a genuine British success story: the UK pioneered open banking in 2017 (based on a piece of European legislation), after a competition investigation into the cosy state of retail and small business banking ordered the nine largest banks to develop standard ways to share transaction data securely with third parties. It has been emulated in dozens of markets around the world; the US is edging closer to its own open banking rules.
The UK claims 6mn active users for open banking. But other countries, in part because their existing banking and payments systems were less advanced, have pushed adoption harder: Brazil reached 5mn connected accounts five times faster than the UK, according to Open Banking Excellence.
Brazil last year switched to a broader open finance strategy. Australia has done the same but gone further, implementing a consumer data right which can be implemented sector by sector starting in energy. The UK’s equivalent, a smart data regime that would establish customers’ rights and enable the sharing of data in other sectors, is currently shelved after an on-again, off-again experience in the political turmoil last year.
Bankwatch 