A new briefing from the Finance Innovation Lab: “Open Banking and Financial Health” summarises the findings of a roundtable event Finance Innovation Lab convened last month when, for the first time, experts from banking and fintech, policymaking, consumer groups and civil society came together to explore what Open Banking means for customers and citizens.
According to the briefing Open Banking holds huge potential: it could put people in control of their financial data and enable products and services that work for customers and citizens. But this potential is not guaranteed. There are reasons to fear that Open Banking will increase information asymmetry and complexity, reduce customer control, and exacerbate exclusion and discrimination.
The report details the urgent action needed to ensure that Open Banking works for everyone in society and recommends that:
- Government expectations for Open Banking and regulatory oversight should be strengthened
- A large-scale social investment programme should be launched to support organisations developing new Open Banking services that benefit customers and citizens, with a focus on non-commercial use and new business models that put social purpose at their heart
- The Financial Conduct Authority’s forthcoming Discussion Paper on a Duty of Care for firms needs to reflect Open Banking developments
- A Code of Conduct for Third Party Providers needs to be established, to help embed responsible data and innovation practices in their businesses
- There needs to be a public awareness and education campaign about Open Banking and the data revolution in finance.