A new report released has claimed that the UK, the first mover and, until now, seen as a global leader in Open Banking will lose that leadership position this year unless drastic action is taken. The Global Open Finance Index, a report released by Open Banking Excellence (OBE) is an in-depth, data-driven exploration of the global state of Open Banking featuring insight from more than 400 Open Banking and Open Finance experts from 23 countries around the world.
What were the key findings of the report?
The Global Open Finance Index builds on the data from a set of expert interviews conducted by the University of Oxford with secondary data from the World Bank, the IMF and Dealroom.co.
The report, which included contributions from Accenture and NatWest was supported by research from the University of Oxford and data from the World Bank that analyzed 23 countries across more than 150 aspects to identify component parts of a successful Open Banking ecosystem. It found that whilst the UK has been a global leader, countries like Brazil, Singapore, India and Australia are moving faster and are likely to eclipse it in the near future.
Another key finding was that whilst available regulatory mandates help nascent ecosystems to establish themselves, it is fundamental that the participants find mutually beneficial arrangements beyond the mandates in order for these ecosystems to thrive and be sustainable.
NatWest has played a leading role in this regard by creating the ‘Bank of APIs’ – an application programming ecosystem that goes beyond the UK Open Banking mandate and is bringing an increasingly wide variety of the bank’s services to customers and partners in convenient ways.
What were the executive remarks of the report?
Helen Child, CEO and Founder of Open Banking Excellence commented, “The Open Banking space represents a huge export opportunity for UK firms. UK technology companies have the knowledge and experience to support countries across the world to positively impact their economy, society and environment, whilst at the same time addressing an export-lead market that has been estimated to be worth up to US $416 bn per year by the end of the decade.”
“This important and vital position is now at risk, due to a stagnant situation at home combined with the enormous acceleration in the pace of competition around the world meaning that there’s a real challenge to that leadership position we’ve previously enjoyed. India’s roll-out has created a group of more than a billion accounts accessible in the same standard.”
“Members of our OBE community in Brazil reached a whooping five million connected accounts in one fifth of the time it took the UK, and Australia is already forging ahead with Open Energy innovation. Now is definitely not the time to rest on our laurels; we need to focus. Firstly, we need to look at Open Finance with renewed energy. There is a data bill sitting in a drawer in Parliament that could and should be brought forward,” Helen Child further commented.
“Secondly, we need to resolve uncertainty around future governance arrangements for Open Banking – we’ve made progress, but we’re not done with this yet. Thirdly, we need to bake regulatory passporting into future trade agreements. If we can take these steps, the door is open for UK tech firms to play a leading role in a period that will see a complete paradigm shift in the way people relate to their money. If we can’t, we’ll be watching from the sidelines.”
Zack Anderson, Chief Data and Analytics Officer at NatWest, commented, “At NatWest, we have sought to champion the potential of Open Banking from its earliest days, as we have always seen it as being far more than a response to new banking regulations. For us, it has always been an exciting opportunity to create a digitized, API-enabled bank that helps our customers and partners access our services in new ways that are most convenient and easy for them.”
“Now, with the advent of Open Finance, we see an even greater opportunity for industry participants to collaborate and co-create embedded services that drive the digital economy.”
Amit Mallick, Managing Director and Open Finance Lead at Accenture added: “Advancements in technology globally – including APIs, data and analytics – are driving the global open finance wave, leading to enhanced and real time financial services experiences for both consumers and businesses. Accenture is committed to working with regulators and others to shape the current standards and support the widespread adoption of open finance solutions and ecosystems.”