Open Banking – so what's coming next?

Helen Child, Founder, Open Banking Excellence (OBE): Market adoption is accelerating, it’s an incredibly exciting time!

I thoroughly enjoyed September’s Money20/20 Europe event in Amsterdam. Always a highlight in the Fintech calendar. 

With thousands of attendees arriving in the vibrant city, the Money20/20 team did a fantastic job of tweaking the event set-up to ensure a safe, sensible experience. The floor plan felt fresh, with wider walkways and large, cleverly-designed spaces. There was less emphasis on keynotes and a focus on more inclusive sessions.

One of the hottest topics was the rise of Open Banking. My previous piece explored some of the current trends, such as Open Banking-enabled payments opening up a world of choice. I wanted to follow it up with a look at what’s next.

Open Banking Excellence (OBE) promotes knowledge sharing, new thinking and partnerships within the industry, catalysing the adoption of Open Finance and Data for better financial inclusion worldwide. Money20/20 is therefore very important to us, and we used the gathering of the industry’s best and brightest to conduct a series of behind-the-scenes interviews with global leaders.

The drivers that will ensure continued growth

“What’s really driving Open Banking is societal change,” explained Connie Dorrestijn, Founding Partner and Advisor, BankiFi. “In the past, banks and financial institutions played an advisory role, taking the lead. People now want more control; they want decentralised access to services.”

“Open Banking creates multiple possibilities,” said Amit Mallick, Managing Director and Global Open Banking and APIs Lead, Accenture. “It will expand into Open Finance and Open Data, which will give organisations access to a huge amount of data they will use to create journeys or propositions suitable for consumers to manage their day-to-day life.”

“It’s a huge opportunity to empower customers to make better financial decisions, increase their ability to save, and optimise spending,” added Sam Seaton, CEO, Moneyhub. “But Open Banking is just a fantastic start; it’s only a small part of the Big Data picture. All financial data, not just banking data, needs to be harnessed, which is why it’s crucial we move to Open Finance and then, long term, Open Data. We need legislation like we had with Open Banking to accelerate this shift.”

“Regarding Open Banking payments, there’s two sides to the coin in terms of drivers that will promote further growth,” said Brian Hanrahan, CEO at Nuapay SAS EU and General Manager at Nuapay UK. “From the consumer side, adoption is about trust and convenience; it’s a mobile-centric payment method, authorised by biometrics, with instant pay-in and pay-out capabilities. On the merchant side, Open Banking brings lots of benefits. We’re seeing the rise of cost-effective options, instant settlements, strong security, and good conversion rates.”

Opening up at a global level

Given the plethora of use cases and benefits, it’s no surprise Open Banking, which had its origins in the UK, is now taking more of a hold globally – some markets are embracing it more than others.

One to watch is Brazil. In alignment with the roadmap defined by Banco Central Do Brasil, the implementation period consists of four phases running throughout this year, which will see the gradual opening up of the banking and financial services sector. 

To support its Open Banking adoption, we recently launched OBE Brazil with a Campfire session that delved into the opportunities on offer, and we’ll be following this up with another session on 2 December, looking at how to break down the remaining barriers. 

“I see a lot of progress in countries like Brazil, Singapore, Australia, New Zealand, and South Africa,” said BankiFi’s Dorrestijn. “These countries are busy implementing Open Banking the right way. But I’ve been disappointed by the lack of progress in mainland Europe which, as always, is a champion of efficiency but not innovation.”

Like the UK, the EU’s approach is also regulatory-driven, drawing on PSD2. But whilst PSD2 says banks must create APIs that interact with third parties, there’s no specific guidance about how to do it. And this has led to a rather fragmented ecosystem, with Open Banking working well in some EU countries, like Belgium, but running into significant challenges in others.

Collaborating with the world’s regulators

For Open Banking to reach its full potential, the world’s regulators must engage with industry players to find the best solutions for consumers.

“One of the largest issues is the myriad types of regulation,” said Greg Storm, Co-Founder and COO, TripleBlind. “For example, in Europe the data privacy construct is GDPR. In Asia, many countries have GDPR plus data residency rules, meaning personal data created in those countries must stay in those countries. It will be an enormous challenge to get applications and products that work well across all those regulatory regimes.”

As we move into 2022, it’s organisations like Money20/20 and OBE that will facilitate the conversations that help move things forward. OBE believes in the power of collaboration.  When you get great people together, amazing things happen...you heard it here first.  Please watch this space for next year! 

Interviews with: Connie Dorrestijn, Founding Partner and Advisor at BankiFi, Brian Hanrahan, CEO at Nuapay SAS EU and General Manager Nuapay UK, Amit Mallick, Managing Director and Global Open Banking and APIs Lead at Accenture, Kat Cloud, UK Policy Lead at Plaid, Greg Storm, Co-founder and COO at TripleBlind, Tracey Davies, President for Money20/20, Hakan Eroglu, Global Open Banking Lead, Advisors for Mastercard, Francesco Simoneschi, Co-Founder and CEO, TrueLayer, Todd Clyde, CEO, Token, Arun Tharmarajah, Head of Europe for Wise, Andy Wiggan, Vice President - Product Management for GoCardless, Dan Scholey, Chief Operating Officer of Moneyhub Enterprise, Scarlett Sieber, Chief Strategy and Growth Officer for Money20/20 and comments from Sam Seaton, CEO of Moneyhub Enterprise.

About Helen Child

Helen is the Founder of Open Banking Excellence (OBE), the world’s leading community of Open Banking and Open Finance pioneers from across the breadth of financial services, including banks, fintechs, BigTech and other industry bodies. 

About Open Banking Excellence (OBE)

Open Banking Excellence (OBE) is the world’s leading community of Open Banking and Open Finance pioneers, including fintechs, banks, regulators, BigTechs and wider financial services institutions. The place where they gather to learn, share stories, spark debate and partner. OBE represents a global movement of like-minded experts who through collaboration provide technical, regulatory and legal insight into Open Banking and its wider implications for a dynamic and innovative financial sector. Connect with us on LinkedIn and Twitter.