Open Banking is a term “far too overused and far too laboured” which has left consumers not knowing what they want or need, according to Matt Perks, head of transformation and Open Banking at Nationwide.
Perks was speaking on a panel at Fintech Connect in London this week, and added that for Open Banking to work it needs to provide services people want to use in exchange for opening up their data.
Ed Johnson-Williams, policy and research officer for the Open Rights Group, added that it’s “difficult as a consumer to understand what is actually going to happen. When you’re told an app is collecting the battery level of your phone every few minutes, if there’s nothing to say why it’s happening, it will look suspicious. What’s really needed is for companies to be really upfront with their customers right from the offset. It’s all about good copywriting at the end of the day.”
Amina Ahmad, fintech ecosystem at Blackbox, said that banks can learn from the retail industry, and undergo some structural changes. “We need to move away from the myth that fintech is this complicated, complex thing. It’s complex because that’s the way we built it, but it’s a consumer business, we should be fulfilling consumer needs.”
Moderator Letitia Seglah, consultant for compliance, regulation and risk at Startup Manufactory, asked if GDPR and Open Banking were conflicting pieces of legislation.
“GDPR is fantastic,” said Perks. “It enables people to take more control of their data, while PSD2 allows people to open up that data.” Peter Smith, global head of industry policy at TISA, countered that GDPR did have conflicts with PSD2, but also with Mifid II: “We’re still ironing out the wrinkles. Johnson-Williams added that though there are still “contradictions”, customers are still being put in control of their data.
When it comes to consumer understanding of GDPR, said Johnson-Williams, “mileage may vary”. “If people have heard about it at all, it’s from constant emails, and they think about it as a vehicle for consent and have little awareness of the other lawful bases from which you can process data.”
Asked whether more could be done in the market to help understanding, Perks stated that “competition is really what’s best for consumers”. Smith added that people are making mistakes in looking at GDPR in isolation: “They don’t consider it alongside the data protection act or cybersecurity bills.” The real challenge, he said, was in linking everything together and viewing the legislation holistically.
Ahmad said that maybe it was time to stop calling legislation like PSD2 and GDPR “innovation”, as it gives people “unrealistic expectations” of what financial firms are doing. Instead, she argued, consumers should just be informed of all the changes happening in the back end to help users understand their banks. “We can put as much legislation out there and follow it to the letter, but it comes down to the question: who do we trust?”