13/01/2018 - big day for banking?


#1

So…

If I’ve got my facts straight, tomorrow should actually be a fairly important day for banking.

  1. ‘End’ of card charges (we’ll see if that makes any difference or if there will just be a sudden increase in general ‘Service Charges’)
  2. Official start of Open Banking - http://www.bbc.co.uk/news/business-42253051

Do you think this is the start of something major? Or will we be looking back in 6 months/a year from now and going ‘Huh? Nothing has changed?’


#2

It may be the start of Open Banking but my understanding is some big banks have obtained a derogation enabling them to put off complying for 6 weeks.


#3

6 weeks - not 6 months. And some banks are ready (I’m assuming Starling is…)

However, the regulator has since given a maximum of six extra weeks preparation time to Barclays, Bank of Ireland, RBS and HSBC. Santander-owned Cater Allen, a private bank that has 40,000 active business current accounts, will miss the deadline by a year, as it needs to rebuild its IT system.

Allied Irish Bank, Danske, Lloyds Banking Group and Nationwide are ready to start on time.


#4

It is a joke some need 6 weeks, one needs a year. They have known about it for years and had well over a year to prepare for it


#5

I’ve read a lot about open banking over the last few months, but what I’ve not been able to establish is who/what services are going to be available for customers from day 1. (which leads me to believe none will be).


#6

I think the fact is from here on in, if you are trusting (some might say foolish enough) to say fine “count me in” and “tick the box” hen all sorts of offers promisses are likely to be made to you Miss/Mr Customer on the basis yu freely hand over your data as in metadata gratis to said institution. Hence they get something concrete and worth significant £ (your private ring fenced data - which you have given away free) {to me that doesn’t seem like a very fair or reasonable deal but hey I am odd not like ordinary mortals, I’m always objecting to what others think is fine and telling them they’re wrong. Perhaps they aren’t perhaps I am. Only snag is I am pretty old I’ve been doing this for a long time and this synical policy works, sadly.


#7

Banks already share our transaction data without our knowledge:


#8

I think Open Banking is likely to be a damp squib. I don’t believe there is a demand from consumers to share their financial information with other providers nor do I believe that many people want to see their accounts/balances in one place (of course there will be some, probably many on this forum).

The idea that it will result in a “better deal” for consumers is also rather laughable. The same result can be achieved with a little leg work now including using price comparison sites and knowing about things like peer to peer lending.

It’s basically a solution looking for a problem.


#9

Open Banking is going to be HUGE! Transaction data is a completely untapped resource for making people’s lives better.

The same result can be achieved with a little leg work

Entire industries have been built on removing “a little leg work”.


#10

The entire use case for price comparison sites is that they remove a little legwork.

I think it’s fair to say that it’s still very early days for open banking and a lot of the biggest benefits are still pie in the sky at the moment.

I’d even agree that for most people the introduction is going to be a slow burn rather than a sudden explosion, if only because the legacy banks move slowly, and they’re not going to lose their market share in a hurry.

But if we’re following the price comparison example - now that people have got used to the convenience, do you think they would willingly go back to doing all that manually? Doesn’t it seem ridiculous that it took so long to automate it? That’s where I think we’ll be with open banking in 10 years.


#11

I wonder how thinks will pan out? To my mind, I think you’ll be surprised as the potential is enormous. I may be wrong. Time will tell.


#12

Who’s actually going to give all these companies access to whatever. Like we don’t get enough spam.

Complete waste of time and money IMO!


#13

Monzonauts, probably. Starlingists seem reluctant to embrace new ideas. :thinking:

PSD2 is one of the premises of both Starling and Monzo in being challenger banks.


#14

I’m more monzo then starling.

They still aren’t getting bugger all.


#15

That’s you’re prerogative. And you get to choose whether you wish to share your banking data with another provider or not, so I think you’re covered. :+1:


#16

I’d say price comparison sites removed a lot of leg work which is why they are successful.

I’m not saying I’m right and everyone else is wrong though, we’ll just have to see how it pans out.

The element about analysing transaction data already exists with Starling, et al.

Open Banking seems predicated on the idea that people have very complicated financial lives. Sure, there will be some people like that but most people will have just a current account (and possibly joint account), mortgage, PCP/car loan, credit card, maybe an ISA, maybe some savings. It doesn’t seem to warrant the approach that Open Banking suggests. Most of these products are self-managing and you only interact with them once a year, if that.

Consider also that quite a lot of people in the UK have less than £100 in savings.


#17

I’m going to sound like a dreamer and this turned into an essay, but hear me out.

I disagree that you need a complicated financial life to benefit. Once you get beyond pure banking and into the marketplace, open banking has far more possibility.

Car insurance, house/contents insurance, payday loans, mobile phone contract, utility bills, broadband, gym memberships, anything that currently requires a regular payment and a fixed term contract. Opening up transactions, letting an aggregator highlight better deals. That’s a quick win.

Next stage is setting up rules, and letting those do the switching for you. Got a credit card? Let a third party keep an eye out for better deals and if it finds one that meets your threshold - say 2% better interest rate -let it do the switch in the background, transfer your balance and close the old account.

Then for bonus points, why not have that third party give you the plastic card instead of your bank? They can point it at whatever back-end credit card provider they switch you to (a la Curve).

Now you have a robot sitting in the background and keeping you constantly on the best deal, and you don’t even have to swap your physical card.

And that’s just the credit card. And once this is in everyday use, people will think of things that haven’t even crossed my mind (as I read somewhere yesterday, who would have looked at the newly released Google maps and predicted Uber?)

But this is why I reckon you’re looking at 10 years for everything to mature and for the real benefits to start appearing for customers of traditional banks. The full scope is a bit mind boggling.


#18

It’s not just about demand from consumers. Big winners from this will be lenders who will be better able to assess risk with access to a person’s complete financial transaction data during a mortgage application for example.


#19

Sadly I tend to agree with the cynical view here. History will show that OB made but a small scratch on the Legacy Banking status quo. I am sorry about that because I had the unfortunate experience while my youngest was at public school of running up against oiks from RBS etc who languish in the depths of leafy Warwickshire and flu up to Edinburgh several times a week in the course of their work. They neither know, nor care more about “real life” or people than they know what hardship is. In a similar vein a current politician who made a claim to be PM based on her motherhood and it’s sterling qualities making her a more suitable candidate than T May (well at least she doesn’t make quite such stupid gaffs even if she’s a poor excuse for a party leader PM) . So “watch this space” but don’t hold your breath.


#20

Hey, don’t tarnish us all with that brush. I’m sorry you had a bad experience but there are many of us at legacy banks doing our best to make the most of the new Open Banking opportunities and present new ways of interacting with finances to our customers.

We aren’t all “oiks” and the vast majority of us are well acquainted with the realities of “real life” with its hardships, swings and roundabouts. We’re always learning and always trying to do better.