Helping UK Finance make Open Banking a driver for innovation

Making banking better, fairer and more open for everyone

The whole financial services industry faced the challenge of Open Banking. By giving banks, insurers, neo-banks, fintechs, and other challengers access to consumers’ data, Open Banking promised better, easier and safer ways to make payments, as well as tailored applications and services to help consumers save time and money.

While it had managed some success, it hadn’t reached its vision of innovating and democratising financial services. This is why the Competition and Markets Authority (CMA) instructed Great Britain and Northern Ireland’s nine largest current account providers to design an implementation entity that would elevate Open Banking.

A challengingly collaborative approach that puts consumers first

UK Finance, UK’s trade association for banking and financial services, came to Baringa for help designing the new entity, the board structure and financial model. To succeed, all stakeholders had to be fully engaged to form a unanimous view about this new entity – quite the feat for a complex project with 100s of stakeholders, many of them direct competitors.

To ensure complete transparency for all involved parties, we designed together; and we mitigated risks together. Education and communication were key to our ‘challengingly collaborative’ approach – encouraging robust debates about what this new structure should look like to help the sector innovate and better connect with consumers. The ultimate success of Open Banking relied on consumers’ willingness to share their data, so we made sure they were central to all considerations.

We engaged with them through consumer groups, paying particular attention to the financially vulnerable and less financially literate so they wouldn’t be inadvertently excluded from the new entity.

A legacy for future FS regulatory transformations

The output of our work was a credible proposal that the CMA presented to the market for comment and challengeThe process that preceded it demonstrated a better way to run cross-industry transformations programmes in a collaborative way. Corporate and consumer adoption of Open Banking has shot up, with the ecosystem now comprising more than 330 regulated firms with 60% of the UK population estimated to be using Open Banking by 2023. [1]

[1] Source: https://www.gov.uk/government/publications/update-governance-of-open-banking/update-on-open-banking#fn:6

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