Dame Jayne-Anne Calls on CMA to Force Banks to Promote Open Banking

Mandating the CMA9 to promote Open Banking 

Powered by Open Banking, Snoop is an award-winning consumer focused business that helps people spend, save and live smarter.

Snoop was founded by a group of highly experienced former Virgin Money executives, led by the bank’s former CEO – and Snoop Chair – Dame Jayne-Anne Gadhia.

We shared a belief that creating an Open Banking-based proposition would enable us to deliver profoundly better outcomes for consumers.

Snoop

Launched in January 2020, our app-based service aggregates customers’ current and payment accounts, analyses their bank and transaction data quickly and intelligently, and provides them with highly personalised, timely and actionable insights aimed at saving them money.

Snoop currently has c.250k app logins per month, is connected to over 50 banks and has a view across more than 210 million banking transactions, which includes over £13.6bn of debits and £13.7bn of credits.

A strong start, but Open Banking has created a fantastic opportunity for UK innovators to transform how both consumers and small and medium enterprises (SMEs) manage and use their finances.

Open Banking

Open Banking was enforced in January 2018 and enabled regulated third-party providers, with a customer’s consent, to access a customer’s bank account information and/or request payments.

According to the Open Banking Implementation Entity, there are now over three million users of Open Banking enabled services in Britain, with new users being added at the rate of a million every six months.

That is excellent progress, but now is the time to make it a revolution in the same way that contactless, mobile wallets and online banking have become the norm.

In each of these three examples, initial caution and limited up-take were replaced by widespread adoption and use of the technologies becoming commonplace.

Underlying attitudes to data sharing 

It is our contention that the main barrier to achieving quicker widespread adoption isn’t technical in nature, but rather it is the underlying consumer attitudes and perceptions relating to data sharing.

In our experience many consumers expect, need and want explicit and visible reassurance from trusted partners to support their decision making, especially when it comes to their banking data and financial lives. That’s where the CMA9 come in.

Mandating the CMA9 to promote Open Banking

Trust in providers delivering Open Banking services (either third party providers or banks) is the key determinant of whether consumers and SMEs are likely to use such services.

The reassurance and validation required to build trust can come from three different sources:

(i) Providers: for example, established banking brands that consumers already use and trust;

(ii) Other consumers: through reviews based on other consumers’ experiences of using such services; and

(iii) Other trusted bodies: for example, regulatory and consumer bodies.

This letter focuses on (i) ‘Providers’, otherwise known as the CMA9.

The CMA9 were mandated to create Open Banking as part of the CMA’s Retail Banking Remedies. The technical framework and standards that will allow Open Banking to flourish are in place.

Now is the time to raise awareness, overcome misconceptions relating to any underlying data sharing concerns and popularise Open Banking to ensure common understanding and mass adoption in the UK.

At Snoop we believe a simple, low-cost practical solution would be for the CMA9 to use their existing digital and marketing assets to point at a single point of truth to help ‘normalise’ Open Banking with the public-at-large.

To be clear, we are not suggesting a marketing campaign funded by banks. The CMA9 could (a) incorporate an Open Banking App Store URL into their advertising (every channel); and (b) add a home page tile which clicks through to the same page explaining Open Banking in a clear and standardised manner.

We believe the website content would work best as a combination of a bolstered version of the current OBIE FAQ and the App Store content referenced above.

Why is this required?

In our experience, when people get Open Banking, they get it, but – as already noted – a significant barrier to mass adoption is the idea of ‘sharing data’ and whether their bank permits such sharing.

It should not just be down to smaller businesses and fintechs with limited marketing budgets to do all of the heavy lifting in building consumer awareness and trust.

Fulfilling the potential of Open Banking rests on consumers putting their ‘active trust’ in the industry and the industry doing its bit to actively promote regulated services.

We believe that the CMA9 actively promoting and endorsing Open Banking (specifically authorised and regulated third parties) would go a long way to establishing trust and providing the reassurance consumers need relating to security and sharing data.

In our view, it has become an imperative if we are to rapidly turn 3 million users into 30 million and meet the original objectives of delivering effective competition to the retail banking market.

Summary

It’s time to make Open Banking work for everyone. Doing so will play a significant part in improving financial literacy and help drive better financial decisions and outcomes for all consumers.

It would play a significant part in accelerating the Smart Data initiative as well as tackling the issues identified in the Citizens Advice super-complaint on loyalty penalty charges and other exploitative problems.

Open banking is for everyone not just tech savvy early adopters and we need to ensure that the many benefits of digitalisation and innovation for consumers are secured.

Putting the CMA9 at the heart of promoting Open Banking would have a game-changing impact to the initiative and would mean lower prices, better service and better overall outcomes for consumers.

It’s time to turn 3 million users into 30 million.

We would be keen to engage further to discuss how you might intervene actively and decisively to accelerate adoption and would be delighted to discuss our views in more detail if that would be helpful.