Is Open Banking Dead?

Not if Open Banking enabled products or services add real value to customers financial lives. Unfortunately, there are not many of those around - yet!

The UK Government forced banks to implement Open Banking over the last few years. The idea was to increase competition and widen customer choice. Open Banking enables customers to allow other financial providers access their bank data. The benefits are limitless and include:

- account aggregation

- budgeting

- tips about better or cheaper products, etc.

Despite a lot of publicity over 70% of consumers have never heard of Open Banking. Those who are aware of it don't consider it a good idea. Customers often associate "Open" with "not secure". They are very protective about their data. Should they care about Open Banking?

I decided to try out some new apps like the Money Dashboard, Bean, Cleo and Plum. These tools are designed to help me with managing my finances such as budgeting, saving. For this to work, I need to link these apps to my main current account. Open Banking rules require UK banks to share their current account holder data.

Unfortunately, I only managed to link my account to Plum. With the other three apps, I received error messages during the sign-up process. My initial reaction was to blame the app providers. But it turned out to be my bank who has a known error and couldn't tell me give me a resolution date.

I managed to sign up with Plum and am very impressed with their savings and investment platform. I am now using a service that sweeps my current account daily with amounts that I can afford. Plum is using an intelligent AI driven chatbot to help with that.

Do I need to know anything about Open Banking for this? No. All I have to do is to decide whether I want to share my current account data. If I like the app and trust the provider with my money, I am on.

I have come to the conclusion that consumers do not need to hear anything about Open Banking. I am disappointed about what I have experienced with the three apps I failed to link to my bank account. Is it because my bank wants to protect themselves and win time until they can offer similar services? When I first called them, they provided incorrect advice and blamed the app. It took be several calls before my bank admitted that there was a known error.

Customers don't care about the regulatory background and technical details. They are put off by the term "Open" given that banks protect the finances of their customers and keep them in a safe. Open Banking per se is dead in the eyes of customers.

Instead, Open Banking providers have to offer compelling products and services. Customers are not interested in Open Banking rules. They are interested in products that enable them to make better financial decisions. If customers see products that are of real value to them, they are more likely to share their bank account data.

I will provide more insights on how I get on with Open Banking in further articles over the coming months. This will include market insights, views from customers and my own experience.