The Future of FinTech Is Changing with the UK’s Open Banking
Open banking empowers fintech startups and innovation
A banking revolution is underway in the United Kingdom—one that could change the way banks do business with consumer and commercial customers all over the world.
The revolution began in January 2018, sparked by new UK open-banking standards intended to stimulate innovation and competition. Under open banking, consumers can authorize registered fintech companies to access their banking data, in real time, including transactions and balances. Open banking “is set to unleash significant innovation across UK financial services,” said Glenn Manoff, senior vice president at research firm Trustpilot, which predicts that open banking will deliver a £1 billion annual boost to the UK economy. Yet Manoff stressed that trust is paramount: Fintech must “[demonstrate] that consumers can trust them with their banking data” or the revolution will fade.
Open banking has empowered a host of innovative fintech startups to challenge the way customers handle their money, whether via credit card products, current accounts, loans or insurance. One open app, for example, aggregates customers’ financial relationships, offering to find better deals on each of their current accounts and credit cards. Another provides detailed digital receipts for customers, along with loyalty rewards.