The government has today (28 January 2015) launched a call for evidence on the benefits of greater data sharing and use of open data in banking, as part of moves to support the growth of Britain’s emerging FinTech sector and ensure customers can get the best deals from the banks.
Greater use of data has the potential to transform how we live our lives, which is why the government has already led work into the benefits of using open data across our public services, such as healthcare and education. We now want to look at whether open data can help us unleash more competition in banking and deliver better deals for customers, which is a key part of our long term economic plan.
As part of the call for evidence, the government is setting out its aim to create a freely-accessible standard for developing software that enables customers to share their bank data with other products or services they use, if they wish, so they can take advantage of easier ways to pay or special offers, for example.
These Application Programming Interfaces (APIs) allow two separate software applications or ‘apps’ to talk to one another and exchange information directly in a secure way. By creating an open standard for developing APIs, the government wants to encourage more banks and FinTech firms to work together to devise new ways to use bank data that benefit customers.
For example, an app developer could design an app to work on a customer’s smartphone which uses the customer’s GPS data and bank data to provide advice on what products or services that customer may like to buy in any given area. This could include advising a customer on whether or not they could buy a cheaper coffee, or to forgo it altogether, if upon entering a coffee shop they have exceeded their pre-set budget for that month.
City Minister Andrea Leadsom said:
Key to our long term economic plan is making Britain the global centre for financial technology, or FinTech, and innovation. Making it easier for customers to use their data in more effective or creative ways can help achieve this, and we think the benefits and opportunities for customers could be huge.
That’s why I’m delighted to launch our call for evidence on ‘Data Sharing and Open Data in Banking’ today. Greater use of data could help customers by letting them know whether they could save money by moving their bank account.
Greater use of data is also about making banks work harder to win customers’ business through enabling new providers to enter the market more freely.
What benefits could more data sharing and open data bring?
The government believes greater use of data sharing and open data has the potential to radically boost competition and innovation in banking, with a transformative effect on how customers bank.
This is backed up by a report that the government published at Autumn Statement on ‘Data Sharing and Open Data for Banks’, by the Open Data Institute and Fingleton Associates.
The government is calling for views from a wide range of sources including the public, FinTech firms, app designers, as well as the financial services industry, on the potential that greater data sharing and use of open data have for delivering new, helpful ways for customers to do their banking and for encouraging innovation in our world leading financial sector.
The call for evidence will run for a period of 4 weeks, at the end of which the government will consider respondents’ views and the best way to deliver positive outcomes on data sharing and open data for customers, the financial services sector and the FinTech community.
Image courtesy of CyberHades on Flickr, used under Creative Commons.