Open banking, ‘open X’: what’s the use?

Why we’re working with the Finance Innovation Lab to explore the risks and rewards for service users

Andy Lamb, Product Manager — Client Journey

As open banking moves on and morphs into the developing concept of open finance, involving a wider range of organisations, it becomes increasingly important to take stock of how the open banking landscape is evolving and just how useful it really is for financially vulnerable customers.

StepChange has long been interested in how best to harness the power of open banking principles for the benefit of debt advice clients and those needing help to manage their finances.

We’re delighted to be working with the Finance Innovation Lab to host an online workshop on 24 June bringing together a range of participants from other charities and the public policy arena to explore these issues.

While some organisations see open banking and open finance primarily as a means to cut costs, manage risk, and streamline service delivery, the risks are that some consumers are actually unable or unwilling to engage with open finance.

If not managed correctly, this could leave them in a potentially worse financial situation, and more financially disadvantaged than before, with reduced access to cheaper products and a greater likelihood of exclusion.

The exam question is: how can the positives of open finance be maximised for consumers at risk of exclusion, and the negatives minimised?

During the workshop, we will be sharing our own experience and the lessons we have learned so far, as we set about embedding digital tools into the StepChange client journey.

Along with my colleague Vanessa, the charity’s head of strategic relationships, I’ll be delving into our experiences of developing new digital propositions — including what we have learnt about open banking so far, and what to consider when designing digital services to benefit both the user and the organisation.

We’ll be revealing some insight into what our clients think of open banking and how we ensure that their voice is heard in our design processes, as well as outlining what we’re doing to move forward with open banking within the context of the large transformation that the charity has been undergoing — and how the pandemic has galvanised the design of new client services.

We’ll outline what we feel we know of how much our service users would be likely to trust/not trust us accessing their details and what impacts that could have for them and us.

And we’ll give our assessment of both the risks and opportunities offered by open banking for poorer/indebted consumers, with reference to how we are looking to improve outcomes for financially vulnerable customers through two-way information sharing between creditors and ourselves.

We’ll also be covering what we believe needs to happen to make sure that the positive opportunities happen, and that the potential negative impacts (exclusion; detrimental pricing; worsening of the “poverty premium”) are not the actual outcomes in practice — and offering some thoughts on how we think the third sector could best mobilise with open finance based on what we have observed with open banking.

As part of the workshop, we’ll be joined by David Beardmore, Ecosystem Development Director from the Open Banking Implementation Entity, Siobhan Dennehy, Head of Economic Regulation at BEIS, and Faith Reynolds, independent consumer expert.

We are excited to be presenting alongside such experts whose wealth of experience from across the whole of the Smart Data spectrum will ensure a rich discussion of open finance and its relevance to the most vulnerable.

As the expectation for more and more data sharing and portability grows, here at StepChange, we believe now is the time to ask how open finance, or, ‘open X’ as it is widely becoming known, could transform markets and what that will mean, not only for our financial futures, but for wider society and the environment too.

We will be recording the webinar and make a video publicly available after the event, so do check back on our website if you’re unable to join us on the day.