Why 2019 will be the year of open banking
It was a bold shout to release a new version of the much-loved classic, Mary Poppins, this Christmas. We humans get strangely attached to some things and Julie Andrews’ character from 1964 was, to use her own words, “practically perfect in every way”.
It was a relief, therefore, to see the essence of the original transported so smoothly into the 21st century in ‘Mary Poppins Returns’. Less impressive was to witness how little had changed for the central backdrop — the bank.
Having traded derivatives for more than a decade, what surprises me about the current state of the financial industry is not the recklessness that is being shown but a conservatism from the banks. In terms of range, quality and ambition, customer service at the mainstream banks is shockingly last century.
That’s why, so many startups are sensing golden opportunities to fill a gap and fulfil growing needs. Technology has opened a new universe of opportunities and customers are starting to realise that they pay far too much at the moment for far too little.
Open banking is turbo-charging this transformation and 2019 in my view will be a revolution. Flux can now put all your receipts at your digital fingertips. Yoyo does something similar but gives you points as you pay too. OpenWrks addresses the pointless paperwork that can make it such a bore to sign up to new financial products, and Zopa are pioneering peer to peer lending.
There are others too, and there will be many more, because they all benefit from what we describe as Open Banking.
Open Banking is a secure way to give service providers access to your financial information. Sharing the data has led to an explosion in innovation because it no longer has to happen in-house. And it’s only just begun.
We at Switchcraft have just partnered with a challenger bank based — like us — in the FinTech capital of the world, London. They promise customers more choice, better products and better prices — all on your smart phone.
Switchcraft promises customers the best energy deal — forever. Once you’ve registered , we can move you with minimal hassle and no expense from one deal to another for the rest of your life — or ensure that your current supplier matches the best deal that our systems uncover for you — day after day after day.
Customers flock to us because we deliver up to £518 in savings on their energy bills and before 2019 is through we’ll be offering the same with insurance policies.
Our partnership with the challenger bank means that their customers will find it even easier to switch suppliers, because simply by checking their statements they can see the potential savings companies like Switchcraft can find for them.
In a nutshell — open banking means YOU — not your bank — own your data. If you’re happy to share, potential benefits will be offered to you constantly without you lifting a finger. And, as your data is already shared, there is no need to repeatedly fill out endless forms with the same core facts.
Most of us after Christmas will tighten our belts a little and go looking for savings. But imagine if those savings came looking for us. A revolution is underway that will force all suppliers to be far more responsive and reasonable. Technology is the slave. The customer will be king. Happy new year indeed.
Andrew Long, CEO & Founder of Switchcraft
