There is a huge opportunity for fintechs to improve consumers’ financial wellbeing by using Open Banking technology, Bud’s latest report has suggested.
The research from the personal finance marketplace app, entitled Beyond Open Banking, noted that the UK has a “gigantic but famously inefficient market for deposit savings that offer, for the most part, paltry returns.”
The report cited a comment from Christopher Woolard of the Financial Conduct Authority, saying that competition is not working well in the easy access savings account market and the regulator wants that to change.
Bud’s report argues that there is an opportunity for fintechs to disrupt the market, particularly those leading the charge with an open-API strategy, who could help end the complicated process of switching services.
The report cited savings apps MoneyBox and Raisin as examples of fintechs aiming to improve financial wellbeing using Open Banking.
Read more: Open Banking hits 1m users
Open Banking refers to the data-sharing initiative that mandates banks to share anonymised customer data with approved third parties, in order to improve competition and offer better services.
“Since Open Banking regulation came into effect, we’ve seen a host of innovative products launch to help people improve their finances – whether that’s through better budgeting, automating savings, comparing products, or finding ways to clear debt,” said Imran Gulamhuseinwala, trustee of the Open Banking Implementation Entity, cited in the report.
“While some people are already using these products, in 2020 we want to see even more people take control of their data and, ultimately, their finances.”