As reported yesterday, the UK's Financial Conduct Authority (FCA) has enforced new rules requiring providers of personal and business bank current accounts to publish information on service quality twice yearly that will help customers to compare accounts from different providers.
The survey data from the Competition & Markets Authority (CMA) asked 16,012 customers if they were likely to recommend their bank’s service to a relative, friend or fellow business.
The mass of underlying customer data from these twice yearly surveys will also be made available to fintech companies, comparison sites and consumer bodies.
It crucially gives some shape to the practical approach the FCA and CMA are taking towards Open Banking, providing fintechs with invaluable market intelligence.
Should a particular financial service be scoring lowly, it suggests perfect room for disruption by fintechs, either as standalone propositions or through partnerships/M&As with those banks with low survey scores.
For the FCA however, it suggests the regulator is taking a proactive approach to Open Banking and PSD2, opening up the market to new participants, with the consumer experience in mind.
And there are many fintech market participants hoping to take advantage of the change. One example is Moneyhub, which has developed a personal financial management app.
“Frictionless finance has arrived,” said the company's CEO, Samantha Seaton, following the announcement that the FCA had authorised the company’s Payment Initiation Services Provider (PISP) status. This adds to MoneyHub's status as an authorised Account Information Services Provider (AISP), and the company has also launched its own API gateway.
“By far the most important benefit of Open Banking is putting the consumer in control of their data and enabling them to influence their own financial wellbeing,” says Seaton. “Companies and professionals can engage with consumers to help them achieve their goals in a clear and transparent value exchange.
“PSD2 is a huge upgrade and positive enhancement that enables consumers to manage their money. The improved security framework and the payment mechanism now originating with the consumer rather than the payee is yet to be truly appreciated.”
The recent litany of legislation has certainly caused a few headaches for compliance officers, with PSD2 and GDPR seeming to be two faces of the same consumer-protecting coin. For Seaton, GDPR compliments Open Banking: “GDPR is a welcome addition to the consumer landscape. As a business that takes personal data seriously including being transparent in how we use and store it, GDPR is simply a formalisation of best practices and Moneyhub has followed these from day one.
“Open Banking is a poor name, firstly it doesn't highlight the wide range of industries this will benefit especially retail - who have been burdened by out of date, inflexible and high cost payment methods," she says.
“Secondly, it doesn't recognise the wider Open Data initiative where access to your own data will become the norm (for example across other sources of data including pensions and investments) over the next few years,” says Seaton.
The Open Banking ethos isn't restricted to the UK, with national regulators across the world acting to support a transition toward a more transparent banking industry.
“Australia and Japan have already implemented the same standards in use by the UK,” says Seaton. “With the great work by the FCA and CMA in association with trade bodies such as FDATA of which Moneyhub was a founding member, the UK now leads the way for the rest of the world.”