53 fintech leaders have joined forces to refute Starling Bank founder Anne Boden’s recent comments that “open banking has not been a success”.
In an open letter to MPs, a group of fintech leaders including Zopa co-founder Giles Andrews rejected the idea that open banking has not been successful and accused Boden of being “uncompetitive”, claiming that her comments were “typical of banks trying to thwart the future of innovation in financial services.”
The letter was signed by Andrews, as well as LendInvest’s founder and executive chairman Christian Faes, Augmentum Fintech’s chief executive Tim Levene, Funding Xchange founder and chief executive Katrin Herrling, Anil Stocker, co-founder and chief executive of MarketInvoice, Nadeem Siam, founder and chief executive of Fund Ourselves, and Freddy Kelly, co-founder and chief executive of Credit Kudos, alongside representatives from dozens of other fintech firms.
In October, Boden told a Treasury Select Committee that open banking has failed to encourage bank account switching, and suggested that other measures might work better.
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However, the 53 fintech founders wrote that this was a “dramatic oversimplification of the proposition provided by open banking”.
“Open banking is bringing about significant benefits to consumers across the country: it offers people greater security and transparency, as well as a faster, more streamlined way of accessing financing,” the letter read.
“Open banking has the potential to unlock even more innovation. It now needs to evolve realising the full potential of open finance as described in the Kalifa Review of UK fintech, and banks trying to stifle this innovation need to be called out, and the market needs to continue to be educated about its benefits.
“The UK was a world leader in developing open banking and it is vital we maintain this advantage as part of our wider ambition that the UK retains its status as a global leader in fintech more widely.”
The fintech founders noted that open banking technology has only been live since November 2018, but has already led to the formation of a whole host of new start-ups, raising hundreds of millions of dollars in new venture capital investment.
According to UK Finance data, there are now more than 2.5 million open banking payments a month, compared to just 320,000 in the whole of 2018.
“Whilst the implementation has been far from perfect, and there are challenges – but we are still in the early stages of the journey,” the letter said.
“[We share] the Treasury’s vision of a payments sector ‘at the forefront of technology and innovation in which the full potential of open banking enabled payments is unlocked safely and securely’, and we look forward to working with the government to achieve this goal.”