The start of Open Banking – an inclusive guide

By Christine Hemphill | 21st January 2018

On the 13th of January, new banking legislation took force in the UK. So what does “Open Banking” mean for consumers, especially those with specific access needs such as disabled or older customers and those with lower digital confidence or skills?

We have written a White Paper  “Open Banking in the UK  – An Inclusive Guide”  that covers this subject in more detail. However, here we summarise the changes and potential impacts to the banking industry, customers and specifically customers with access needs and preferences.

If you would like to read the full white paper, please email us with your name, company and role and we will send it to you.

Open Banking requires the 9 biggest UK retail banks to provide customer data, when asked for with individual’s consent, in a secure and standardised way to other financial service providers.

Individuals can now access their personal banking and finance data and chose to share it with other banks or regulated financial service providers.

So what is this change? What does it mean to customers? Importantly for us working in inclusion, how could this impact digital access, usability and security for people with specific requirements?

Banking is fundamental to independent living

The ability to bank and manage finances independently is a key part of independent living. The rise of digital banking from its start with ATMs to online banking, mobile apps and online payment systems has both greatly assisted and sometimes greatly frustrated customers with disabilities or other access needs.

Here at Open, we are excited about Open Banking. We hope it will enable the development of better, simpler and more inclusive service solutions for customers with all kinds of access needs.

Our summary of the eventual impact of the changes is that…

Well designed and built aggregated online services are more likely to emerge

Where people have accounts with more than one bank, they can now provide permissions to access and interact with all of their data in one place. This helps consumers understand and interpret their overall spending more easily and could assist them make better future product and spend decisions. It could also bypass limitations where they currently frustrate customers in a specific bank app or website. Now they can provide rights to another financial services platform with a better interface and manage their finances from there. This is particularly useful for those who have access needs or strong preferences.

We will see service separation

Services such as online personal money management could be provided separately to the underlying financial products (current accounts, loans, credit cards and savings products). This should increase service design quality overall as new players compete to attract customers to their offerings and current banks react and improve their services or lose out as customers stop using their services. A services based business model will also provide enough scale to attract banks and other regulated financial service providers to specifically design for and support defined preference groups. This could provide the opportunity for specifically inclusive interfaces to emerge.

Products will commoditise and proliferate

Products may become more commoditised with more transparent pricing and features so people can better select those that best meet their needs. Smaller market segments will be more attractive to provide products for if they are easier to reach. Therefore some specific products that could suit disabled people, less financially or digitally literate, older customers and those with financial and/or mental health concerns are likely to emerge.

Open Banking could advantage a huge audience including,

  • those with a disability that use assistive or adaptive technology
  • older customers
  • customers with older devices or operating systems
  • those with lower digital skills or financial literacy
  • any of us simply in a situation that provides a temporary access need such reading in bright sunlight, transacting on a bouncy train or operating in a second language
An old woman's hand on tablet

Older people with increasing access needs may benefit from the new regulations

However there are risks to customers

Security

With more freely flowing data, there is increasing opportunity for fraud, scams and privacy risks. These are particularly true of vulnerable customers, specifically those who are older and less financially or digitally skilled and confident.

Sales

We may also get sick of all the providers telling us how much better off we would be if we moved to their service. The marketing and advertising fraternity will be clear winners from this change.

Speed of progression

Finally, the benefit to consumers of increased competitiveness will not occur immediately following the implementation of the new rules that allow customers to move personal data. Until sufficient customers are willing to use that newly provided ability, it won’t have much impact in attracting new products and services into the market which in turn will increase the need for current banks to improve their offerings.

The most transient customers are likely to be young, urban, mobile-centric, digitally confident, high potential but low asset or liability (loans/mortgages) customers. Therefore mobile app based credit and savings products and clear, straightforward money management and investment tools are likely to emerge first. If well designed, these are useful to a much broader demographic. Markets that feel underserved currently, to a point that the change is worth it, are also likely to be earlier adopters of Open Banking. These may include people with specific access needs, such as older customers and those with disabilities.

In summary

There will be some risks, challenges and delays following the implementation of Open Banking in the UK. We still hope and believe that it will provide an environment that is more conducive to improved competition in the financial services industry and enable better products and services to be created that more fully meet the needs of all customers.

The concepts that we now think of as “accessible” or “inclusive” banking that in less enlightened organisation are issues “fixed” at the end of a digital service build, we hope will transform more simply into customer expected, consistently provided, good banking and financial services. Inclusion would be built in from the start with a range of users in mind, tested along the way with representation from the full breadth of that target group and provide more adaptable, simpler and higher value independent financial management for everyone.

To better understand the potential impact on customers’ ability to independently and confidently understand options, buy products and manage their finances, we have written a White Paper “Open Banking in the UK  – An Inclusive Guide”  to outline in more detail,

  • what is actually changing
  • how we think it may impact banks and their customers
  • we look at potential impacts on those who require services that are accessible and inclusive

If you are interested in a copy, please email us with your name, company and role and we would be pleased to send it to you.

Did you find this interesting?

Did you enjoy this blog post? If so, let me know by emailing me or tweeting @openforaccess

If you are interested in discussing these concepts with us or creating or improving the inclusion of your products and customer experiences, please contact us. We would be delighted to have a more specific discussion with you.

Find out more about what Open Inclusion does and how we can help you on your accessibility journey

Some links for further reading

A good overview article from Wired

http://www.wired.co.uk/article/open-banking-cma-psd2-explained 

The Open Banking Implementation Entity was created in the UK by the Competition and Markets Authority (CMA) to deliver Open Banking and PSD2 in the UK. Their website has articles, information about the API standards and requirements, information about security requirements and consent models for customers and service creators.

https://www.openbanking.org.uk/

Internet banking penetration statistics UK 2007-2017. It shows the growth from 30% in 2007 to 63% in 2017 of customer regularly using online (internet or mobile) banking services.

https://www.statista.com/statistics/286273/internet-banking-penetration-in-great-britain/

The Family Resources Survey quoted that was used to generate the Purple Pound figure was released in April 2017. It was conducted by the Office of National Statistics. For more information on the FRS please see https://www.gov.uk/government/collections/family-resources-survey–2