Open Banking driven forward by data-sharing millennials

By Edwin Boadu | 21 August 2018

“Fintech companies are on a mission to make financial services and products accessible to everybody,” according to Michelle Pearce, CIO and co-founder of Wealthify, the online investment service.

Firms such as Wealthify can embrace Open Banking, and give everyone “the chance to have an investment portfolio built and managed by experts every day, even if they only have £1 to invest”.

Wealthify makes use of challenger Starling Bank’s online marketplace, connecting via Application Programming Interface (API) to reach the bank’s customers.

“We’re democratising investing,” she continued. “We think everyone should have the opportunity to make their money work harder, whether you earn an average wage, or you’re a millionaire”.

Part of the success of Open Banking lies in the younger generations’ willingness to share their data for frictionless and convenient accessibility to services, according to an Altus survey into attitudes towards online personal finance and the potential impact of Open Banking on millennials.

Altus surveyed 1,000 UK working adults, younger and older generations, across the country as part of their consumer research.

The survey revealed that over half of 25-34 year-olds (54%), who are comfortable using an online service, are also happy to share information on all of - or a combination of - their savings, investments, pensions, other assets and their debts. Compared to older generations, the percentage of the millennials is significantly higher: 49% of 35-44 year olds, 44% of 45-54 year olds and only 35% of over 55.

What this means is simple: younger users are attracted to both accessibility and convenience, as they are open to an online service, which allows them to have all of their financial information in one place across all providers (balance, savings, pensions, loans, mortgages etc.).

“Although it wasn’t a conscious decision to target millennials, our recently-launched ethical plans are like to be another aspect of our service that will appeal to this group”, said Pearce. “Young people are more than twice as likely to be interested in ethical portfolios compared to over 45s, according to recent research by Boring Money”.

“The advantage millennials have over everyone else is time,” she said. “They have more time than anyone to put their money aside and give it the chance to grow, as well as build it up gradually with regular payments.”

When it comes to Open Banking, Altus’ survey suggests that 68% of 25-34 year olds would be interested in an online service that stored their personal, financial and medical information in one place, prioritising the value exchange of convenience and benefits over any potential security threat.

Pearce emphasised, however, that “security and privacy are two of our top priorities. Building our systems from the ground up means we’ve been able to build security into every stage, without the challenges of dealing with legacy systems.”

In the wake of GDPR, she said “we were already operating in the spirit of GDPR before the rules came into force in May 2018 and pride ourselves in undertaking to achieve the highest standards of data and privacy protection”.

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