Harnessing the power of Open Banking and Open Finance – exclusive interview with Moneyhub

The Paypers sat down with Sam Seaton, CEO of Moneyhub, a company with a long record of service in Open Banking and Open Finance and also a founding member of FDATA. Sam’s ambition is to transform the world of financial services - enabling businesses to take what they do well for smaller market segments and make it available to a much wider and deeper market base in a cost-effective, highly efficient technology-led manner. Ultimately, this will result in a more holistic and delightfully personalised service for all. Long term, Sam sees Open Banking and Open Finance as the precursors to Open Data and she will tell us what this means for businesses and consumers.

Can you tell our readers a bit about your professional background and the history of Moneyhub?

I grew up in Australia and started my career at Telstra, Australia's largest telecommunications company by market share, in a graduate Information Technology programme. In 1995, my sports passion gave me the chance to move to the UK in order to compete on the Equestrian International Eventing circuit. My horse of a lifetime and I made the long list for the Sydney 2000 Olympics but not the team, which meant I stayed in the UK and had my father's long time advice about getting on and doing some actual work ringing in my ears!  I took on a full-time role as a Consultant at Towers Perrin and have never looked back. 

I spent much of my time there developing personal financial management software but when I joined Moneyhub in 2016 it was clear that Open Banking and Open Finance were going to enable enterprises to create next generation solutions. We have already shown that our innovative approach can have a transformative impact on both short- and long-term financial wellbeing.  

Moneyhub was a founding member of FDATA back in 2014. We were the only non-banking member of the working group that created the Financial API specification known as the FAPI spec - the standard used in the UK (and the EU) to comply with Open Banking (PSD2 legislation). This standard is now being adopted around the world. We were also the first Open Banking service to offer true PISP payments and transfers (faster than BACS or card payments and more cost-effective and secure than direct debit) between almost any account. We are still leading the way in Open Finance innovation and implementation. 

While Open Banking has already driven innovation, Open Finance will to a larger extent provide consumers control, clarity, and insight over their holistic financial data. What are the most underserved consumer and business segments that would really benefit from Open Finance?

We are incredibly excited to be providing our clients Open Finance data connections, intelligence and payments through our APIs and also the possibility for them to white-label our Personal Financial Management (PFM) platform. Our clients include global employee benefits consulting firms, wealth and asset managers, fintechs and product providers including Aon, LEBC, Mercer, Moneyed, Nationwide, SEI and many more. This means millions of people benefit from Moneyhub's unique Open Finance Data Aggregation, Data Enrichment, Categorisation, Analytics and Actionable Insights. 

However, there is much more to be done and the underserved segments still need more effort to put this right. From a consumer point of view, the advice gap cannot be ignored. Technology is the obvious answer to address this gap because consumers are embracing technology at some pace for everything they do. Using technology to provide advice is game changing. Moneyhub’s Data and Intelligence APIs currently underpin many robo-advice solutions to make advice highly personalised and effortless whilst being truly scalable. We applaud the work that our clients Arq, Lumio, OpenMoney, and Wealth Wizards, for example, are doing in this space.

Finally, some consumers find themselves in real financial trouble through common life events, such as divorce (42% in the UK) job loss or ill health. COVID-19 has emphasised just how fragile finances can be through no fault of your own. So we asked ourselves, how can people in financial difficulty be helped by our Open Finance solutions?  

Personal debt is a huge burden so repayment plans that dynamically optimise ensuring debt is repaid as quickly as possible without causing additional financial stress (and even finding spare cash to help the consumer for the long term) has to be the way forward. Moneyhub already enables this new mode of debt management in distress which is transformational in an industry with such a poor reputation for looking after people when they need it most. 

"With Moneyhub it is possible to reduce the cost for debt collection while improving the long-term financial wellbeing of people."

Businesses use your technology to enhance their customer’s experience: could you give some examples of solutions you have built with your customers? What other channels or partners do you work with to deliver better access, control, and insights to consumers?

We pride ourselves on solving real-world problems with our platform. From the ease with which payments can be initiated for consumers, as shown by our client Roqqett and effortless cash management for consumers and businesses with Akoni Hub, or the consumer-centric advance salary payment with Level, not forgetting the amazing work OneBanks is doing to service the unbanked with their kiosk solution - the work that Moneyhub does in conjunction with our partners is phenomenal. That is before we mention BankiFi who are re-engineering the world of banking payments and Vantage changing the lending industry, all using Moneyhub’s Data, Intelligence, and Payment APIs.

Moneyhub helps enterprises understand in real-time what their clients and customers are doing. Our Analytics and Actionable Intelligence technology provides meaningful insights with our nudge store. They can also see how money is being spent, meaning that they are able to keep abreast of consumer trends more easily. This path from insight to value creation is a real lifeline to retailers who live and die by consumer spending habits.

When it comes to wealth management and product providers, we help consultants build a stronger relationship with the ultimate end investor. Transparency is increasingly important for investors and regular sight of the positive impact that their investment strategy starts a virtuous circle, where investors feel encouraged to stay and invest more.  

The Moneyhub platform is also able to sit on top of underlying legacy systems. This means we can bridge the tech gap for many large enterprises, including Building Societies as a good example, delivering the ability to strengthen interactions with their customers without the need for an expensive and lengthy IT overhaul.  

Moneyhub is a Payment Initiation Service Provider (PISP) as well. What’s the potential benefit of Open Banking and Open Finance powered account-to-account payments for those making the payments (consumers) and those accepting payments (merchants)?

Open Banking and Open Finance now pose a clear and present threat to the dominance of the established payment ecosystem built around card payments powered by American Express, Discover, JCB, Mastercard, UnionPay and Visa who collectively own EMVCo, the standard behind EMV chip card payments, by fundamentally undermining their business model. Superseding these, fintechs can now vastly reduce the costs that merchants pay per transaction and remove the cost of a POS chip card reader and card-based payment architecture. 

Bigger players such as American Express charge up to 6% per transaction, whilst smaller ‘challenger’ options such as iZettle, Stripe and PayPal can cost around 2% per transaction. This includes debit as well as credit cards which means that the prolific use of cards is a significant cost to the business. Monzo recently reported that 80% of its revenue is generated from a commission fee when their card is used. These revenue streams are no longer sustainable with Open Banking and consumers are seeing outmoded practices for what they are.

Moneyhub’s Payment API initiates account-to-account payments at a fraction of the cost. Based on proprietary Moneyhub technology and the banks’ own Faster Payments free money transfer service, this puts a lot of money back in the pocket of businesses at a time when every penny counts.

Speed is also now no longer a hurdle. The technology and legislation ensure that anyone can get paid immediately by using Open Banking. Hairdressers, plumbers, fencing contractors, to name just a fraction of this market segment that would love to be paid for what they do when they do it.  Job done!

We are also moving to a safer world of payments as, thanks to our Payment API, consumers have control over what is paid, while merchants can reduce their payment transaction cost and increase cash flow at the same time. As Open Banking and more broadly Open Finance is embraced, its effect will be transformative to businesses and consumers alike. 

About Sam Seaton 

Before becoming CEO of Moneyhub, the Open Finance data and intelligence platform, Sam worked for global advisory firms and innovative financial forecasting businesses. She is also one of the ten industry representatives on the Money & Pensions Service’s Pensions Dashboards Programme (PDP).

About Moneyhub 

Moneyhub is the Open Finance platform that enhances the lifetime financial wellness of people, their communities, and their businesses. Moneyhub’s APIs and white-label solutions power businesses with data connections and actionable intelligence leveraging Open Banking payment initiation to enable hyper-personalised experiences with their clients and their customers, both from within and from outside of Financial Services.