Thought Leadership

Open banking: expert predictions for 2024

09 February 2024

As OBL, and open banking, looks ahead to what will be a pivotal year, we cast an eye into the future to see what changes 2024 will bring, and asked the Parliamentarians, ecosystem and industry leaders to share their predictions for this financial innovation. We summarise their contributions below, and you can read the full article here.

As the Data Protection and Digital Information (DPDI) Bill makes its way through Parliament, John Penrose, Conservative MP for Weston-super-Mare, suggests that while the bill does many welcome things to equip the UK for a data-driven world, “The block of smart data clauses are the ones that matter most for our economy. They build on the foundations of our world-leading position in open banking, so we can extend the same approach quickly into other industries too.”

Lord Iain McNicol of West Kilbride comments that: “We need to go faster and further in championing smart data and open banking, which can be achieved through schemes that allow consumers to make better decisions, and enable innovation.

One of the most effective areas of smart data is open finance; through the expansion of provisions into new areas, it will have a greater social impact, and be a true public good.”

Gavin Starks, CEO of Icebreaker One, adds that: “The UK stands at the forefront of delivering a trusted smart data economy, one that not only protects but also empowers individuals, communities, businesses and society. In 2024, by harnessing our collective success, industry experience and policy leadership, we can deliver tangible economic, social and environmental impacts.”

Open data delivering financial benefits for consumers

Tim Rooney, CEO and founder of alternative lender Salad Money, highlights the continued importance of open banking data as part of accurate, more inclusive credit assessments. He adds that the Salad Money is “using open banking to improve access to fair financial products by offering those who may have been excluded by mainstream lenders a different route into fair, affordable credit”.

Scott Mowbray, Cofounder and CMO of money management Snoop, explains how open banking apps will continue to help consumers make more informed financial decisions by providing easier access to information and promoting better financial habits through the intelligent use of data.

Supporting cost savings for businesses and the public sector

At the Federation of Small Businesses, Policy Chair Martin McTague believes open banking has the potential to help small firms become more efficient, by putting their financial data in one place, streamlining tasks such as processing payments, and highlighting financial concerns before they snowball into serious problems.

Jon Bellamy, Senior Partnerships Manager at Xero, points out that digital bank feeds are one way small firms can save time on manually uploading bank statements, while having bank transactions flow directly into accounts software can provide up-to-date data on cash flow that can inform business decision-making.

In terms of the public sector, James Hickman, Chief Commercial Officer at Ecospend, anticipates that the implementation of the Crown Commercial Service’s open banking dynamic purchasing system will help many other government departments to access open-banking driven efficiencies and cost savings.  

Industry and regulatory collaboration is vital

“The Government must provide industry with a clear vision for the future and encourage better collaboration between all parties to accelerate innovation and competition to deliver consumer and business-focused offerings. This will require a sustainable and equitable commercial model.”

Stephen Wright, Head of Regulation and Standards, Bank of APIs NatWest

Fliss Berridge, Co-Founder, Ordo, believes there is a clear desire to catalyse a sustainable model for open banking innovators, and that there are several firms – including Ordo – that will be ready and able to a pilot of premium APIs for VRPs live by 1 July 2024 – as requested by the Financial Conduct Authority and Payment Systems Regulator.

Finally, we hope that our own work with the Smart Data Council will continue to progress wider regulatory initiatives that will deliver the benefits of open banking to other economic sectors such as energy, transport, telecoms, home-buying, and retail, taking open banking beyond a competition remedy to deliver a true public good.

Read the predictions for 2024