“Selling the sizzle, not the sausage”
Making a success of open banking
Third party providers will be the focus of Steve Tigar’s, CEO of Money Dashboard, presentation at the MoneyLIVE Summit this November. With banks slow to implement open APIs, how are TPPs responding so far and what can be done to make open banking a success? In this interview, Steve shares with MoneyLIVE’s Winnie Cheung his views on the future of open banking.
W.C. It is taking the majority of banks a lot longer to open up their APIs than expected. What do you think is holding them back in its implementation?
S.T. The implementation of Open Banking has of course been slower than FinTechs like us had initially hoped for.
Putting to one side the significant technical challenge of implementing systems to make customer data available in a stable and secure manner, some banks will view the legislation as a major threat to their existing operating models and understandably so. It’s therefore not wholly surprising that the implementation has experienced delays.
W.C. Some customers are sceptical about the benefits of open banking, what can be done to encourage greater uptake of third party services?
S.T. The key to success for financial services operating in this space will be to win the hearts and minds of customers and to make clear the various benefits that Open Banking promises to deliver. I believe this is largely a marketing challenge; third party services need to embrace the old advertising adage of selling the sizzle, not the sausage. We’re signing up hundreds of new customers every day so we are already seeing a sizeable audience embrace “open banking” services, even before all the bank APIs are available.
“I believe this is largely a marketing challenge; third party services need to embrace the old advertising adage of selling the sizzle, not the sausage”
W.C. To what extent do you really believe that account aggregation services will become the new norm with customers, and why?
S.T. The adoption of these types of services has been slow in the UK when compared with countries like the US, where millions of consumers already trust comparable apps to help with their finances.
Given that 40% of UK adults reportedly feel they’re not in control of their finances and a massive 19 million people don’t have an approach to budgeting they feel works, the size of the problem in the UK is a clear indicator that consumers need help. Open Banking presents a huge opportunity for services like ours to serve these consumers, as it provides a safe framework for consumers to try new third-party services.
But I also expect a wealth of new services to emerge from account aggregation providers like our own. These will empower consumers to get the best deals on products like loans and mortgages, as well as more clearly see what charges their banks are serving them and whether they would be better off with another provider. Once these benefits are clearly communicated with the consumer, adoption of third party services will rapidly increase.
Steve is CEO of Money Dashboard, the UK’s leading fintech in personal finance. The award-winning app gives consumers the TrueView of their financial position by consolidating all their current accounts, credit cards and savings accounts. The company also generates insightful market research from anonymised bank statement data. Steve has also previously led a high-growth PropTech business and was awarded a scholarship to a one year leadership and entrepreneurship programme in Boston USA for Scotland’s most promising business leaders.
Steve Tigar will be speaking on the second day of the MoneyLIVE Summit, which will take place on 26-27 November 2018 at etc. venues 155 Bishopsgate, London.
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