I was really pleased to welcome participants from investment platforms, financial advisers, and workplace pension providers to our latest technology roundtable, to discuss the opportunities and challenges presented by Open Banking to the financial services market and the financial advice profession.
As an industry leading provider of software solutions, Bravura creates and uses technology to help financial services firms increase efficiency and better meet the needs of consumers. Bravura’s Innovation Lab is tasked with analysing emerging technologies and trends and how we can apply them for our clients’ and broader consumers’ benefit. We think Open Banking and other open data initiatives, if adopted and treated properly, show exciting potential to deliver innovative products and services.
Data is often referred to as the “new currency”, as firms that have been granted access to consumer data will have a better understanding of those consumers’ behaviours. Broadly in Open Banking terms, this means transactions and other details from consumer bank accounts. Being able to understand these spending habits provides a spectrum of opportunities – from “nudges” to top-up our ISA or savings pot with change from our morning coffee, to a financial adviser, investment platform or even your employer having a more detailed understanding of a person’s wealth and spending patterns and offering more tailored services to match these. Furthermore, applying other technologies such as machine learning to this data could see trusted firms creating and offering consumers a full suite of more personal products and services.
We have only begun to scratch the surface of the opportunities that this initiative could bring to financial services. The primary challenge will be for firms to get better at explaining to people how their data is being used. As a teenager, I was a prolific reader of Philip K. Dick, an author who wrote of dystopian futures where monopolistic corporations and authoritarian governments use machines to interpret data to the point they came to know people better than they knew themselves. The Open Banking initiative came at a time when the Cambridge Analytica and Facebook mis-use of data scandal were front-page news. The moral area of “data ethics” will undoubtedly develop further, and perhaps these recent events will cause consumers to be more mindful of who they share data with, especially under the new regulatory regime of the General Data Protection Regulation (GDPR).
At Bravura, we believe that data initiatives including Open Banking coupled with other technological innovations– such as machine learning, artificial intelligence and blockchain – present a wealth of opportunities for us and our clients (and their clients too) to use these services as part of their digital lives. For this initiative to be a success, financial services firms need to be seen as an important part of consumers lives to benefit from Open Banking and also persuade those same consumers that a proper governance structure, ethical code and a communications program is in place, to bring them on this journey safely.
I would like to thank our participants for taking part in the roundtable and myself and the Bravura team welcome any questions, challenges or feedback you might have on Open Banking, or on other areas of technological innovation.