THE BLOG
20/12/2017 11:18 GMT | Updated 20/12/2017 16:46 GMT

A Lifetime’s Spending, Shopping And Borrowing? What Open Banking Could Mean for You

Hereforth's TNN on Open Banking with Rowland Manthorpe

Tuesday, 7.59am, Farringdon. And I’m rushing at speed towards The New Normal. I’m late again – nothing new there. But what is new and, dare I say it, strikingly abnormal, is my attendance at a tech event, which would previously have left me cold.

HERE/FORTH (an emerging technology advisory) hereforth.com/tnn recently launched a global futures community on Slack called ‘The New Normal’ (TNN), which hosts bi-weekly networking events to gather and debate the latest tech and tech industry issues affecting us all. Structured networking opens every TNN, followed by one speaker (or a small panel). This week, the inaugural speaker was Wired’s Rowland Manthorpe.

Speaking passionately about Open Banking (which will come into existence in January 2018), Manthorpe revealed the opportunities and disruption ahead for the big banks and challenger banks. Thanks to the well-caffeinated crowd, a lively Q&A followed with Rowland closing with: “We are increasingly at risk of monopolies. Automatic switching [of banks] may be great, but you can only trust intermediaries so far. The problem is too big. Open Banking could work pretty well... but it could cause a big bank to close because of squeezed margins, rising innovation costs and other factors.”

Open banking represents a pivot point because of the changes coming to the industry in 2018 as the CMA (Competition and Markets Authority) forces big banks to compete for business more and open up their data to licensed third party start-ups through application programming interfaces (APIs). These changes happen on January 13th, 2018. The new rules will force banks to create open APIs so that customer data can be shared between organisations (and incorporated into third-party applications) in a standard, consistent format.

‘What does this mean for me?’ you may well ask. Well, let’s take a closer look. Firstly ‘their’ data is your data. The financial authorities say that Open Banking will enable personal customers and small businesses to share their data securely with other banks and with financial third parties, allowing them to compare banking products on the basis of their own individual requirements and to manage their accounts without having to use their bank. So the type of bank account and the activities and benefits of that particular account can be more effectively matched to your needs and, no doubt, will come at a more competitive cost than the big five currently offer. This will mean a broader set of products and services to choose from. So far, so good.

On the flipside, and beyond the shiny packaging, the financial sector’s opportunity could also be your loss. Where Monzo card‘s visibility tech is giving you more financial flexibility and control, Open Banking will give more visibility of your financial behaviours and pulling power to third parties. Account holders will apparently first approve any exchange. But when they do, then the data lying dormant in bank accounts – electricity bills; mortgage payments; weekly spend on cappuccinos – will become as easy to exploit as personal details online. As Manthorpe puts it: “What could financial startups (or Amazon, or Google, or who knows who’ll step in here) ...”make with the authoritative record of a lifetime’s spending, shopping and borrowing? It’s a treasure trove…”

Further, given the rise of hacker activities, then who knows where your vital stats will ultimately end up – particularly in a more vulnerable start up environment. Let’s face it, given the choice most people would never want to share their data with a third party. But in times like these it’s all too easy to fall for the first tantalising special offer or promotion that comes your way, without thinking of the broader implications.

As for technology hubs and meet ups? I’m seriously impressed. I’ve always admired individuals with the motivation and passion to stir positive debate and bring change. Technology is permitting this at every level of society and Here/Forth is leading the charge in the professional sector.

This first TNN drew an eclectic crowd from VCs to executives from top tech brands such as Samsung to, naturally, the finance sector (Barclays, Coutts, Monzo) along with consultants and agency folks like MHP, Headland and Mindshare. The debate was lively, informative and thought-provoking, with a rapid exchange of cards, new business opportunities, speaker recommendations and mentor requests at the end.

The New Normal is a free-thinking collective that raises real questions and shares in knowledge, empowering a more partisan agenda in tech and cultural innovation. What started out as a ‘drudgerous’ 8am commuter bun fight became something quite extraordinary. Discovery, advancement and new ground – and all before lunchtime!

The next TNN ‘Speak-Up’ is January 16th and will focus on

“The Future of Work. Guest speaker is Bruce Daisley, VP EMEA, Twitter

HERE/FORTH is run by PaulArmstrong, author of ‘Disruptive Technologies’ published by Kogan Page. amazon.com/Disruptive-Technologies-Understand-Evaluate-Respond/dp/0749477288