As you may expect with a GDPR linked initiative, privacy and trust are at the heart of open banking -- particularly important when you consider heightened sensitivity around what happens to our personal data when we hand it over. The permissioned sharing and use of data offers the customer increased comfort, while institutions can make better provisions for the way they serve consumers. By increasing customer comfort with how they use financial services, providers will be able to offer products to those who may previously not have been eligible. The “un-banked” populations that are currently underserved by financial institutions—and their long, complex, and often intimidating procedures for opening accounts and applying for loans—could very well see these barriers to access fall if open banking is deployed in an inclusive manner.
The 1.7 million adults in the UK alone without any relationship to a bank could be offered a very different pathway into a positive relationship with the world of financial services. By shifting the focus back to the customer, tools such as EY’s Digital Passport will allow these potential customers, as well as the wider public and businesses, more control over how their data is shared and for what purpose.
From the customer’s point of view, it gives them control and transparency over who has access to their data, allowing them to share their information easily and confidently across many institutions – everything from banks to utility providers and tax authorities. This can drastically reduce the time it takes to create new relationships and get onboard with new services. Digital Passport can also provide banks and other institutions with much more unified data about their customers.
The open banking regime inaugurates a new data-first in financial services, and tools like Digital Passport will allow banks to harness it. Upcoming regulations will require a much firmer grasp on where and when financial and personal data circulates between consumers, financial institutions, and other service providers. All of this means consumers are acquiring greater control over their financial data. The only question is what they will do with it?
This article was produced on behalf of EY by Quartz Creative and not by the Quartz editorial staff.
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