The UK Open Banking Implementation Entity (OBIE) has launched an online app store for customers and businesses to find and easily compare open banking-powered mobile applications and online products, per a press release seen by Business Insider Intelligence.
Business Insider Intelligence
The store currently lists 51 apps that provide solutions covering payments, borrowing, accountancy and tax, financial advice, and more. The OBIE was launched in 2016 and is governed by the UK’s Competition and Markets Authority (CMA). Its aim is to nurture the UK open banking ecosystem by designing the specifications and standards for secure API architectures, issuing guidelines for open banking participants, and increasing awareness and consumer adoption of open banking.
The launch should drive consumer adoption and promote a level playing field for banks and fintechs alike to market their open banking-enabled solutions.
The app store eases consumers’ and businesses’ access to open banking products. Earlier this year, the OBIE reported that over 1 million UK consumers and businesses have connected their bank accounts with trusted third parties, taking advantage of open banking services. The app store will accelerate adoption further by aggregating regulated providers’ offerings in one place, simplifying interested users’ access to and comparison of available services.
It also presents an opportunity for fintechs to compete on the same footing as banks, although the enrollment process differs. The online platform impartially displays open banking solutions, regardless of the type of service provider. This enables fintechs to have the same consumer and business reach as larger banks, as they can market the benefits of their solutions over traditional players in a neutral setting. However, fintechs face stricter enrollment requirements than incumbents because third-party providers, such as a number of fintechs, need to first be regulated and test their services in the Directory Sandbox, whereas banks and other account providers can directly join.
Despite the app store simplifying access to open banking-enabled products, general consumer lack of awareness and business distrust of financial data handling continue to limit adoption. Only 18% of UK consumers are aware of open banking, according to PwC research, although this is expected to rise over the coming years.
This lack of knowledge could result in many consumers not seeing any point to visiting the OBIE’s app store, limiting the success of the project. In addition, a majority of small firms have reported concerns over data privacy in the use of open banking. These results suggest that public perception constitutes a significant barrier to adoption, irrespective of open banking products’ value propositions. Fintechs should therefore focus on awareness and educational campaigns around the benefits of open banking-enabled solutions, to both pique consumers’ interest and ease potential concerns.
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Source : From the Web