Should high street banks be threatened by the advent of Open Banking?
YES – Paul Rippon, deputy chief executive and co-founder challenger bank Monzo.
A lack of competition has helped the big banks thrive for years. They’ve had little incentive to deliver better products or lower prices, and rely on the inconvenience of switching to keep people’s custom. Ultimately, this means that customers lose out.
The arrival of Open Banking proves there is both consumer desire and regulatory support for increasing competition within the industry. If it works as intended, it could help challengers gain momentum and wrest power away from the big banks.
The way we interact with banks is changing. At the moment, we choose our bank for relatively arbitrary reasons (for the free gift or because it’s where our parents bank). We then stay with them for years, using their products for all our financial needs.
Instead, we’ll soon be able to access our pick of the best products the market has to offer, while also being able to view and manage all our finances from one single place. This will be a victory for consumers, and a very real threat to traditional banks.
NO – Leon Muis, chief operating officer of ING’s Yolt.
Open Banking is the combined efforts of the government, banks, and third-party providers to reinvent the banking ecosystem and make it really work for each and every customer.
The Competition Markets Authority is positioning it as a technological revolution, which we hope will help drive further competition and innovation. Having access to more data than ever before should open up a world of opportunities for banks and third-party providers.
Open Banking is designed to further empower consumers by allowing them to make better financial decisions and have more control over their money. Yolt was designed with the principles of Open Banking in mind, and since our launch last summer, over 100,000 registered users have benefitted from this, demonstrating that there is a real appetite for such services in the UK.