February 9, 2015
The UK government recently 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.
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.
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.