What is the Open Banking initiative? The clue is in the name.
Introduced on January 13 2018, Open Banking was designed to give customers and companies control of their financial data, enabling them to view it in one place. It was also intended to provide a secure way of sharing that information with third parties and give access to better deals and a wide array of financial products and services.
We covered this topic last year, and concluded that Open Banking was a pivotal moment for small businesses and the accounting profession, while representing a significant step towards a digitised future.
Now, almost a year on, the uptake by medium-size and large firms has been slow. But, the benefits of Open Banking are predicted to take form by 2020, according to a survey from Centtrip.
Why the delay? Well, the benefits are clear (saving time and money, both internally and externally, security and fairness), but as with any movement, it takes time — key stakeholders, the one’s making the decisions, need to get onboard. This is, perhaps, the main hurdle to overcome. And, the research from Centtrip concurs: only 28% of older business decision makers fully understand the initiative, compared to 85% of 18-34-year-olds.
Open Banking: moving forward securely in this bold new world
Breaking down the barriers
Although a considerable amount of development has taken place behind the scenes to make Open Banking available for wider use, 8% businesses still have no idea what it is. The lack of understanding of the benefits of Open Banking has meant that 59% of respondents are not yet reaping its rewards.
Brian Jamieson, CEO and co-founder of Centtrip, said: “Open Banking has a huge potential to shift the way financial data is shared and managed. A year on from its launch, we are just starting to understand its benefits and the way it may reshape the financial sector. Even so, many business leaders have yet to reap its rewards and realise its potential to revolutionise the way businesses approach and manage their financial information. Collaboration between FinTech and banks is the root to its success. By joining efforts, they can do a lot more than when on their own when it comes to putting it to use.”
So, has Open Banking transformed the way organisations manage and engage with their finances, across the spectrum for consumers, businesses, banks, retailers, advisers and pension providers. The answer, not yet.
Watch this space! (I know an annoying end to the article!)