Open for all

The recently published report Unlocking digital competition is another example of how powerful the ideas underlying open banking are. Given the origins of the UK’s open banking regulations – not just PSD2 but also the Competition and Markets Authority’s (CMA) investigation into the retail banking market – that’s hardly surprising.

In the UK, last year’s personal data portability study (from Ctrl-Shift, for the Department for Digital, Culture, Media & Sport) underlines how big the opportunity is across multiple sectors. Australia’s Consumer Data Right starts with the banking sector, but then looks to energy and telecoms. Similar scenarios will doubtless soon be playing out in other countries.

While the financial services industry is largely focused on more immediate challenges and opportunities, it will be fascinating to see how ideas (and regulations) cross-pollinate between different sectors.

The Furman review is also a timely reminder that the motivation behind open banking is not to give banks and fintechs access to consumers’ data. The aim is to put power in the hands of consumers themselves. Of course, that may well involve consumers choosing to share that data – but only if it is in their interests.

What does all this tell us? In part, the same things as the industry has been talking about for some time – the need to build trust, demonstrate value, offer a great customer experience.

But also a warning that attempts to become a ‘platform’ – the holy grail for many strategies – must recognise the reality of data portability. If success is going to rely on retaining control of customer data, you may need to think again.

Nb: We look forward to discussing these issues with Ctrl-Shift at the Open Banking World Congress