Where next for Open Banking? It’s all about the value.

Are consumers ready for Open Banking? When we speak to gambling operators, it is clear there remains some doubt around that subject. “Are people really going to agree to do this?” is a common (and fair) question. 

The answer - broadly speaking - is ‘yes’.

The truth of the matter is that when consumers feel a need to engage with Open Banking, they are ready to do so. And as regulations around affordability in gambling become ever stricter, that time is coming soon.

Before getting into that, however, let’s take a step back and see how the land lies today - and why.

What is Open Banking?

If you’ve never heard of Open Banking, don’t feel too bad. Nor has half the population of the United States. Even here in the UK, where Open Banking has seen greater adoption, a mere 14% of consumers claim to “completely understand” the subject.

But in fact, Open Banking is relatively straightforward. In the context of this piece, it is simply the requirement for banks to share an individual’s financial information with third parties, and allow payments into and out of the relevant account, providing the individual themselves provides explicit consent. 

That’s it. 

More important is why it matters, and why the European Union saw fit to legislate for Open Banking through the Revised Payment Services Directive (PSD2), legislation that effectively continues to apply in the UK. To understand this, it is necessary to understand that financial data has value. Access to that data enables individuals, and third parties that work with those individuals, to provide financial services and make better decisions relating to that person’s financial situation.

In the past, that ability has been limited to banks themselves. And as you might expect in a monopolistic situation, they didn’t do a whole lot with it. In this world, if an individual wants to share financial data with a third party, they need to either provide paper bank statements or (please look away now if you care about data security) by sharing log-in details. 

Open Banking changes this landscape. It allows financial details to be shared with the click of a button. It is the reason a whole host of new financial services companies are changing the way we buy insurance, the way we apply for credit,