The immediate impact of Open Banking will be less of a torrent of activity and more of a gradual opening flow of information. “Go-live” for many of the regulations are scheduled for this week and next week, but the extent that market participants are able to fully comply remains an open question. However, what is not in question is the shift in direct control consumers will be able to exercise over the sharing of their own transactional history and the updates. What this hold for consumers was summarized by the author of the article thusly:
To get financial guidance under the current system, consumers and businesses alike are required to hand over confidential banking information to each unique price comparison or advisory website, and this requires the process of signing in through your banking service. From that point onwards, you are essentially allowing a third-party to access your data, then act on your behalf when searching for deals.
Open banking cuts the red tape and streamlines everything into one comprehensive service. This opens the door for innovative and agile new companies, especially those with a focus on technology, to build entirely new services which put the consumer at the centre, rather than the financial institution.
Mercator Advisory Group will be closely following the development I n the market as established FIs incorporate standardized sharing to consumer data at the customer’s behest with regulated third-party financial service providers. The proverbial other shoe to drop will be the General Data Protection Regulation (GDPR) that will be going into effect in May. FIs and the third-party financial service providers will be aiming to both ensure that directions to share data freely are adhered to while also respecting the need to protect and contain consumers’ data for those individuals that wish to remain private. At its core the developments in the EU in 1H18 will serve as a laboratory for individual control over personal financial data, and Asian and Western Hemisphere governments will be watching the experiment closely.\
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
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