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DirectID: Frictionless Finance Report – March

Welcome to the Frictionless Finance Report, DirectID’s monthly look at everything new in the world of Open Banking, FinTech, and consumer experience. This month we examine industry’s response to the Kalifa review on FinTech and the consultation on a new replacement body for the OBIE.  

Open Banking 

The role of the Open Banking Implementation Entity (OBIE) in getting Open Banking off the ground in the UK has been of paramount importance. 

Over the last three years, since its inception and birth out of the Competition & Markets Authority (CMA), the OBIE has cajoled, reassured, informed, inspired and articulated the way forward for Open Banking. 

With Open Banking in the UK reaching an inflection point, the CMA has begun consulting on how to take Open Banking forward. 

Early suggestions from the CMA suggest that UK Finance have proposed a new body be created to take on the responsibilities of the OBIE. In their article, Finextra posit: 

It is proposed that the new entity will provide a set of service capabilities which meet the needs of the OB ecosystem and help ensure its stability and resilience. These include managing the centralised OB directory, maintaining technical standards and enabling future improvements. 

It is thought that as part of the new proposals, the new body will the power to pave the way for the introduction of Open Finance, an extension of Open Banking that is more encompassing, covering products such as savings, investments, pensions, mortgages and more.  

Trustee of the OBIE, Imran Gulamhuseinwala, said: 

Open banking has been critical to supporting the UK’s emerging and growing fintech industry. We have pioneered the technology and as the Government said only last week, it is now taking the world by storm. 

As OBIE comes to the end of the implementation phase, we look forward to working with the CMA, who will set out the next steps and we encourage any external stakeholders to contribute to the consultation.

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Jana Mackintosh, managing director of payments at UK Finance, said:  

We know that it is vital that the industry works together to realise the opportunities for even greater innovation of a new generation of banking-related products and services. Our proposed model for the future service company will help facilitate these exciting developments for years to come. 

There has been heavy coverage of the news across many news outlets, including Sky NewsAltFiReutersFinextra and the Paypers. 

Elsewhere, what we are seeing more and more of on a daily basis is calls to action for Open Banking to assist or supplement another part of the financial world. To that end, it feels like the introduction of Open Finance, allowing consumers to manage their entire financial lives from one screen or one dashboard, may not be that far away. 

This month we have read articles advocating for more use of Open Banking within payments, mortgages and savings.  

In Mortgage Finance Gazette, Jack Tenwick of Yolt Technology Services notes that mortgage process, even in 2021, is still slow and cumbersome. Using bank data to prove income and affordability, and assisting in ID & verification, could markedly increase customer onboarding, and crucially, allow people to buy their homes faster. 

He also counters however, that at present, too few consumers are aware of, or trust Open Banking technology. Both lender and consumers, therefore, need to be educated on the benefits and security implications of using Open Banking. 

Two further articles in Finextra note how Open Banking could help both those who want to save more and in payments. Mike Peplow of Paynetics writes that with the use-case for Open Banking, having been proven beyond doubt by the introduction of Covid-19, it is now only a matter of time before it begins to surpass BACS as the preferred way to make payments in the UK. Using Open Banking, real-time banking alongside ‘request to pay’ allowing for real-time reconciliation of accounts. 

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Meanwhile, Josh Rix of Woodhurst Consulting writes in the same publication that Open Banking could be a real boon for those on lower earnings or who find it difficult to put money aside from month to month.  He earmarks some of the new popular savings’ apps which round up money automatically, using Open Banking, and writes that next stage will be for apps to switch products when a better rate of interest can be found on another product.  

Best of the rest in Open Banking: 

  • Natwest is implementing Open Banking payments for its business customers. It will allow customers to send money to recipients without having to know their banking details. News via 
  • In a survey from Yolt Technology Services, 42% of banking leaders want more information, support and guidance on data security within Open Banking. News via Mortgage Introducer.  
  • In a separate survey from Temenos, and based on responses from 300 banking professionals, it found that 45% are set to change their business models to become a digital ecosystem. 29% have specific plans in place for Open Banking. News via Finextra 


Read the full report here

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