Startup Manifesto: Use the Open Banking approach to open everything

Policy 17: Use the Open Banking approach to open everything

In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. We’re sharing the policies on our blog. To read the full manifesto, click here.

Open Banking allows consumers and small businesses to share their banking data via a secure API with approved third parties, and to allow those third parties to make payments on their behalf. Its objective is to “unbundle” banking services from the traditional current account so that bank customers can access third party services, like accounting and payments software, without the need to move accounts.

The Open Banking principle could be applied to other products as well. The FCA is currently considering whether to extend Open Banking-style APIs to other financial products like savings accounts, mortgages and insurance, and BEIS is considering a wider application of data sharing through secure APIs to markets like energy and telecoms as well.

This “Open Everything” approach will have increasing returns as more kinds of data are made available. Many businesses spend lots of time and money managing everyday expenses like energy and telecoms, or end up spending too much because they get stuck on expensive deals. Data sharing would allow them to delegate the task of shopping around to a trusted intermediary. 

It would also unlock valuable data to innovators, with the owners of that data remaining in control of how it can be used and by whom. In energy, for example, data sharing would make demand-side response viable, so that businesses that could help people draw electricity at times of lowest demand, for example by providing home batteries that can charge in the middle of the night, to save huge amounts of money and allow us to move to renewables that might otherwise be unviable because of intermittency.