Most people know where Open Banking started, but the most intriguing question is where is it going? Marie walker from open future world has the answer to that

Trying to establish where and when Open Banking started can cause an argument, especially if the conversation involves people from more than one country. But what is clear is that Open Banking has now become an unstoppable global movement. More than that, we understand more and more that Open Banking is only a starting point in a broader transition towards a world of Open Finance and open data in general.

Different countries vary in their approach, reflecting local preferences, market structures, regulatory environments, etc. The UK and EU may have pioneered the regulatory approach, while the development of Open Banking in the US has (so far) been largely industry-led. As UK / EU Open Banking regulation focused on payment accounts, more recently countries like Brazil and Australia have shifted to a broader approach to Open Finance or the law. consumer data.

Despite these differences, Open Banking and Open Finance around the world keep asking the same questions and even the same answers. Questions of security, standardization, consent, trust, etc. are discussed. Financial service providers are moving towards a business model that can deliver value to the customer and benefits to the organization. Smart institutions (and regulators) learn from the experiences of others.

More data, please

Among the many solutions that are put on the market, a clear trend is starting to emerge. More data can provide more powerful solutions.

For example, bank account transaction data is used for faster and lower cost credit decision, which can both increase acceptances and reduce defaults. New services are helping to ensure that a wider range of payments is factored into credit assessment.

But add other data sources – for example, cell phone data – and this type of solution is able not only to improve lending, but also to integrate the unbanked and underbanked into the financial system. . It can be a life changing transformation of the individual.

Take it a step further and start combining other types of data, for example on the carbon emissions associated with different products. Then you look for solutions that don’t just empower the consumer, but could make a significant contribution to global sustainability.

At the same time, we are starting to see forward-looking banks building ecosystems around verticals such as real estate. They are starting to create entire families of services – and data exchanges – around the customer. This is a critical step for banks, according to Liz Brandt, CEO of Ctrl-Shift: “Customers don’t live their lives in product silos, they want banks to understand and support them in their own. unique life course ”.

Innovative Chinese super apps have built ecosystems so rich that regulators are now reasserting their control. Meanwhile, regulators elsewhere may see the potential, for example with the European Data Strategy and the UK’s Smart Data Initiative. The United States opens up data on health care and open energy is in the spotlight in Australia.

Towards the mobility of personal data

We are moving away from the traditional product-centric mindset of the financial services industry to truly focusing on the customer. As the ecosystems built around the consumer grow, so does the mobility of personal data.

In October 2021, we are collaborating with Ctrl-Shift on the world’s first OpenX event. As they put it, “many businesses today acquire personal data through the ‘narrow mailbox’ of their own customer interactions. The future is one where the mobility of personal data across large, cross-industry ecosystems enables much deeper understanding and more valuable customer services ”.

Of course, there are huge challenges to overcome along the way. As with Open Banking, we will undoubtedly face resistance from incumbents who seek to maintain control of “their” data for as long as possible. Defensive organizations will focus on compliance rather than opportunities. Interim partnerships will not work well, as cultural differences are difficult to overcome.

But we will get there. And the more organizations, countries and industries can learn from each other, the faster it can happen.

This article originally appeared in The Paypers` Open Banking Report 2021.

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Marie Walker is co-founder of Open Future World, the open banking and open finance community. Marie sets the agenda for the Open Banking World Congress and the company’s OpenX events, and hosts the famous Daily Edit of open finance news and opinions.

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Open Future World brings together the best people and ideas from the world of Open Banking and Open Finance. Free resources include the Open Banking World Congress, OpenX Congress, Open Future World Directory, and Daily Edit, helping the community stay informed and connect with peers and prospects.