UK Open Banking Implementation Entity’s chief technology officer Chris Michael was speaking at an event at Stone & Chalk when he made the remarks in relation to the UK’s experience with open banking.
“I think consumers don’t care and don't really need to know about open banking. I don’t think there is any need to educate consumers about open banking,” he said.
Mr Michael said consumers needed to be aware of two things when it came to open banking but not the actual backdoor processes itself.
“The consumer needs to be aware around best practice and not giving their credentials away. I think the one thing consumers do need to be aware of, and that is that if something goes wrong, they need to know where to go, who to call when something goes wrong.”
Open banking was an opportunity for the banks, said Mr Michael, and it was pleasing to see Australian banks had adopted that mindset.
“It's much less risky for a bank to look at this as a commercial opportunity as rolling a regulatory compliance exercise, not least because the phrase I use is that people don’t do things very well when they’re told to do things, but if they do them really well, if they want to do them,” he said.
However, the Australian regime was missing support in the implementation, he said, and it was up to the regulators to step in.
“If someone needs to perform that support role to really help answer Fintech’s questions, iron out issues and provide some sort of centralized dispute resolution or, making sure problems are solved, and encouraging banks and Fintechs to work with each other, but in that sort of testing live proving phase leading up to the live phase. Certainly to the regulators, that there is a need for that sort of support activity to go on,” he said.
UK banks were investing millions of pounds in open banking said Mr Michael and the real winners would be those that provided additional services.
“The banks are saying, well actually I can leverage this now, I’ve now got this infrastructure in place, I can now enter into contracts and provide additional services and that’s where there’s the opportunity for banks and Fintechs.
“I think what we’re seeing is that there’s some use cases that can be met with the regulatory free stuff, but the really exciting use cases probably require that commercial level,” he said.
Mr Michael was joined by George Miltiadous, the head of open banking deliver for HSBC UK; he said that HSBC had been on quite a quick journey as delivery of open banking was done on a tight time frame.
“Between start of publication and delivery, we had about six months, which is a very, very short time for a technology program to be launched in an organization. From day one, compliance it just didn’t work out. It wasn’t ready for consumption by end customers,” he said.
Mr Miltiadous said HSBC had discovered plenty of opportunities by going on this open banking exploration and it had helped the end consumer.
“Open banking gives an opportunity to offer more personalised customer standards. It makes communication easier. It makes bringing their business in easier. It allows you to create a little bit more [rapport] with the customer; a closer relation to the customer. A little emotional connection there,” he said.
HSBC had plenty to still bring to market, said Mr Miltiadous, and the following year would see some of those enter the market.