It’s been a busy few weeks for OpenWrks. After being named the first-third party provider to be FCA authorised and fully registered in the Open Banking directory, launching the new OpenWrks website, developer portal and sandbox API and being the first Fintech to successfully connect to every bank in the Open Banking Managed Roll Out.
OpenWrks are right on the leading edge of Open Banking, already working with clients to deliver value from Open Banking for mortgages, business lending and debt management, we caught up with the boss, CEO Olly Betts, for an update on the Open Banking managed rollout, what the future of Open Banking looks like and how OpenWrks is making life better for consumers and business owners.
I’m an engineer by qualification. I’ve always enjoyed solving problems.
I spent many years at TDX figuring out how we could use data and technology to help companies take a more personalised approach to collecting money owed by their customers without having to knock on their door. We took that from an idea to a global data company and out of that came an obsession with data, its availability and how it can be positively applied to help improve people’s everyday lives. There are too many decisions being made that impact the financial well being of people based on limited, static and out of date information.
A concern I have with the majority of data-driven financial decisions is that they are made without the subject of that data; you and me, either aware it’s being used or being able to see the direct value that using our data is delivering us.
I started OpenWrks because Open Banking represents an opportunity to fix these problems. Open Banking will finally give us all a choice about what financial information we share, with who and for what purpose. We will be the controller and ultimate beneficiary of our information and sharing will allow us all to enjoy faster, more personalised financial experiences, products and services.
In your life as a consumer, you are presented with a lot of products and solutions which are dumb. They’re not built for you or offered to you based on your needs, they are built for the “average” and offered to everyone.
You see some markets where things have become highly personalised, such as social media platforms where, with our consent, we are presented with content, offers and products which interest us because they are highly targeted and based on a rich profile of information we have provided to the platforms.
But if we’re just talking about financial services, this type of dynamic, behavioural information is missing. Consumers are being presented with financial solutions based on whether they paid their last credit card bill, not how much they earn or how much their life costs.
The reason for this lack of personalisation is because financial data is not open. As a result, companies providing financial services today share information to help them determine people’s track record of repayment via credit bureaus, resulting in a narrow, borrower focused view of people’s relationship with money.
This cannot result in the best outcome for consumers and businesses.
I want to make sure that richer, Open Banking data, is available and usable for every financial services provider. It means they can more easily provide each of their customers with a more personalised product that suits their specific needs at that exact moment in time.
There are two opposing forces at the moment. There are the forces of regulation and fear around data security, where you could paint a picture that no one wants to share any information and with GDPR coming into play, everyone’s suddenly going to delete their online footprint.
But there’s an opposing force and a view that I’m more in favour of, that people will start to share more information about themselves in pursuit of more personalised services. People are comfortable sharing that information where it gives them the opportunity to get clear value in exchange.
People share private information with Facebook and publish it to the world, they don’t just share it securely with a third party. So you can make the argument, why is banking data any different?
The obvious counter to that position is that what we earn and what we spend money on is private. But people spend a lot of time on Facebook and Instagram disclosing exactly what they spend their money on, be it a watch, a holiday, food or cats.
GDPR will help protect people’s sensitive information and put them in more control of who that information is shared with and for what purpose. This is a great step forward for all of us but it won’t result in less data being shared.
That’s why Open Banking is so interesting.
Open Banking represents a fundamental change because of the granularity of the data that you and I will be able to share and the total control we have over who we can share it with and for what purpose.
It seems obvious to me that financial decisions should be based on people’s income and spending behaviour and what is actually in their bank account. It’s more up to date, relevant and contextualized than existing backward-looking credit data. Great innovators have been paving the way in using this real-time financial information for years, the ability for consumers to share this information in a secure way, is what will enable Open Banking to redefine financial services for everyone.
It depends on the use case, but I don’t think it makes any sense to talk about Open Banking to customers. No-one will buy Open Banking, but it will change all of our lives.
For real people, who don’t live in the Fintech bubble, Open Banking sounds a bit scary, it would take massive education to ensure people understand that it is ‘open’ in a good way. However If you say, ‘here’s a faster way to fill out your mortgage application’, ‘here’s a way to get a more accurate insurance quote’, ‘here’s a way to get a better rate on your loan’ or ‘here’s a way to get some insight into your finances and save for your future’ – that’s how people will understand and use the value of Open Banking without even knowing it exists.
E.g. people aren’t buying Facebook or Instagram, they’re buying an experience and what it enables them to do. Connect and share things with people they choose.
Our bank account data may feel more personal than our holiday pictures, but people will share it in the right context whether that’s to get faster, more personalised and flexible loans and lending, or a better way to understand what they’re spending their money on and where they can save.
In the short-term Open Banking can deliver the most value to people by improving the existing processes I mentioned earlier; prepopulating application forms, allowing faster lending decisions, automated mortgage applications etc.
This always happens with innovation. It starts by improving something that already exists to create a new norm, it’s not something earth-shatteringly new. Smartphones only improved the ease of taking digital photographs by a small percent, yet there are now 800 million people using Instagram every month!
This is how Open Banking will change our lives. It will start by making our financial lives a bit easier but ultimately it will provide the means to completely change how we manage our entire financial life, every day and on any device.
We’re very much at the forefront of the Open Banking movement and heavily involved in the current Open Banking Managed Roll Out.
The treasury, the CMA and the Open Banking Implementation Entity (OBIE) set a deadline of 13th January 2018 for the 9 largest banks in the UK to be able to demonstrate that they had Open Banking APIs available for regulated businesses like us to access.
This was the start of the rollout and as some banks missed this deadline, there’s been a sensible approach taken, which is to work with a limited number of third-party providers, like Openwrks, and controlling the volume of requests we all make to the banks APIs to ensure that they’re robust.
We’re helping the banks manage that, helping them understand how best to work with us and then how end users, i.e. real people, are authenticated and verified and then how the data transfers through APIs.
So far, I’m pleasantly surprised by the level of bank readiness.
My overall assessment would be better than we thought it would be. Not as good as it should have been. But this is why Open Banking is needed because the banks aren’t very good at technology and data, they are good at handling money.
In terms of our own progress, we were the first third party provider authorised and registered on the Open Banking directory. The team were working hard on the weekend the APIs were released, meaning we were right at the front of the queue.
The pace of our technical team has been incredible in these first few weeks. They’ve been working closely with each bank’s technical teams to understand how each API has been set up, so it was really pleasing that we were also the first third-party provider to successfully connect which every bank currently available on the managed rollout. It proves our capability and shows that whatever challenges we’ve had in front of us we’ve been the first ones to overcome them.
Open Banking will move out of the managed rollout phase hopefully at the end of February, start of March. That means that the banks APIs will be available and in theory not limited by volume or amount of requests that can be made.
When we feel that the banks and the APIs are mature and scaled enough, then we’ll release them into our OpenWrks platform and make them available for our clients to start using so they can begin creating new products and experiences for their customers. It’s exciting!
In the next year, the focus is continuing to be at the front of the race to get the banks integrated and to provide a very simple, secure and single API that our clients can access with the regulations, consent flow and data mapping all taken care of.
Alongside some out the box tools that we’ll start to deploy, we’ll be looking to improve existing processes, so where manual bank statements are asked for today, automating that process and where manual affordability processes take place today, automating that.
Onwards from there, we have a number of other use cases that we will bring quickly to market to solve other existing problems in today’s financial ecosystem. Our clients are ambitious so we want to accelerate their product roadmaps so that they can get those more personalised financial products to market faster.
In the medium, to longer term, there’s a whole plethora of use cases we can think of using real-time bank data to drive new business models and radically improve existing ones.
I will consume every application powered by Open Banking not just because I am interested, but because I see how it can add real value to my life.
Applying for and getting credit is pretty fast at the moment, but Open Banking will make that even faster and also reduce the rates that people can get accepted for. Mortgage applications or re-mortgaging, not having to go through all the income and expenditure would be a massive time and headache saving benefit.
And then for me, some of the killer apps that people have talked about will be on my home screen, personal finance management, all my money in one place, moving money between accounts ensuring that I’m not paying to much interest on debt and maximising returns on savings or investments.