Open Banking is just the opening scene of a three-part drama of total economic transformation

Open Banking is existentially important. By pioneering the exchange of customer data between financial institutions through Application Programme Interfaces (APIs), it is the leading experiment in the economic consequences of giving consumers ownership and control of the data they create through their interactions with business and government. The success of the experiment matters intensely because the impact of data-driven transactions on the structure of capitalism as a whole, let alone finance, is potentially revolutionary. Open Banking, driven either by regulation or by market forces, is now at various stages of development in at least 11 jurisdictions around the world, including the United States and Australia. But it is the United Kingdom which pioneered Open Banking, and where enough time has now elapsed to pass at least an interim judgment on its success. True, its origins lie in the relatively modest ambition of fomenting competition in the oligopolistic retail banking market of the United Kingdom, where a 2016 Competition and Markets Authority (CMA) report concluded that the behaviour of the nine largest banks had created “adverse effects on competition” to provide personal and business accounts and loans to SMEs. But the apps developed by third party providers (TPPs) – there are nearly 238 registered in the United Kingdon and nearly 500 across Europe as a whole – are introducing techniques that are prompting changes at incumbent institutions and which could overthrow them altogether by fundamentally changing the way business is done. With Open Banking now morphing into Open Finance, similar effects are likely to be felt soon by incumbents in the insurance and savings industries. An Open Data economy is also becoming visible, with initiatives to use customer data to facilitate switching in the energy and broadband industries now under way in the United Kingdom as well as other jurisdictions. This webinar, hosted in partnership with Trade and Invest Wales and Fintech Wales, will gauge the success of Open Banking in the United Kingdom so far, explore its evolution into Open Finance and Open Data, and ask what an Open Data economy will eventually look like and what it implies for a range of new and established businesses in the financial services industry. 

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