As the world starts warming up to the Open banking culture, there is always going to be this tug of war between control and agility. As regulators tune their policies around data sharing and open banking, they will have to make decisions on how much control Financial services firms have over customer data.
At the same time it is also critical to work towards an agile open banking framework within a controlled and secure data sharing ecosystem that takes care of customers’ interests. UK, like in most other aspects of Fintech, has been spearheading open banking in policy and execution, but it would be myopic to assume that open banking starts and ends in the UK.
I have touched upon different regulatory approaches to open banking and customer data sharing across the globe in my previous posts. Today, I focus on three of my favourite Fintechs in the UK that are regulated to provide open banking services.
ClearScore, as the name indicates, are focused on providing free credit scores to consumers. They are an award winning Fintech firm who have been in the news over the past three years for all the right reasons. ClearScore provides free credit scores, but make their money from advertising credit products that are chosen specifically for a customer.
They provide all the key tools for customers to understand their credit score and go for products (that are within their affordability) like timeline of scores, alerts, factors affecting scores etc.,
How does open banking help? With the help of transaction data Clearscore can now offer greater visibility of customer finances, by blending their credit history with their current spending habits. ClearScore has recently announced that they are having conversations with Experian on an acquisition deal.
Funding Xchange is an SME lending market place, that is designated by the British Business Bank. They are only one of the three to be designated, and are currently the only independent Fintech to have that privilege. They have close to 50 lenders on their platform, and provide a closed loop mechanism where lenders compete for deals from SMEs.
Funding Xchange have won several awards in the last couple of years, and most notably were mentioned in the Chancellors Budget 2017 for their position in the SME lending space.
Open banking has allowed for several inventive ways where Funding Xchange can use data analytics to enhance efficiency of lending and validate product specific affordability models.
Bud is another award winning Fintech that focuses on Personal Finance Management through AI. Bud brings together data from multiple Financial Services providers via its aggregation technology. Access to transaction data through open banking API helps Bud understand users’ spending patterns, and provide suggestions on saving money.
Bud’s payment capability enables users to move money around their ecosystem in one place. They also provide a marketplace for financial services that customers can choose from. Bud is currently in Beta but have integrated their platform with many top FS providers with a consumer base of 10K so far.
These players and a few others not only add efficiencies for their business through open banking APIs and data analytics, but also create opportunities for businesses partnering with them.