The open banking revolution that never was

At the start of 2018 open banking launched in the UK.

A secure way to give financial providers permission to access your financial information, enthusiasts predicted consumers would finally be able to use their own data to their own financial benefit while worriers wrung their hands over what it would mean for data safety including our much-targeted personal information.

Few would have said that by the end of the year the whole thing would have somehow sunk from view.

In fact, fewer than one in four of us has even heard of open banking. A new report from Splendid Unlimited, a company that helps retailers and banks design and build new digital platforms, suggests that just 9 per cent of people have used open banking services and four out of five don’t know what it means or entails. Brave new world this isn’t.

“Overall, open banking providers are failing to address the lack of trust, privacy and security concerns, and ignorance of the benefits of using their products,” warns Paul Bishop, founder of Splendid Unlimited.

“These findings highlight a number of key challenges open banking service providers must now address and offer key lessons for the effective and successful rollout of other new technology-driven service innovations – notably, the further and more widespread introduction of blockchain technology – both in the financial services sector, and beyond.”

But that doesn’t mean you can’t gain advantage from open banking and, predictably, a range of fintech firms are offering open banking-enabled products.

Here are a handful of the current options, but as awareness and demand grow there are likely to be more. Perhaps this particular revolution is more of a slow burn.

Yolt

Its name may sound more like a probiotic yoghurt but this app is actually very smart. It syncs all your accounts and credit cards so that you can see them all in one place, combining the data in order to provide clear information on spending, as well as upcoming debits.

That data analysis allows you to see a “smart balance”, which is how much cash you have left to spend after bills have come out. Users can set goals and budgets and track their progress.

After launching in June last year, it now has half a million registered users, mostly in the UK. The app is free to use but it will offer financial deals and products it considers suitable and earn a commission if you sign up.

Chip

When a customer gives Chip access to their current account it uses an algorithm to analyse their spending and work out how much they can afford to save each month. Then it siphons that cash away into a savings pot.

A small amount of cash is transferred out every few days, the idea being that this is easier for most people to budget around. It’s saved into a Barclays instant access account and you can earn up to 5 per cent on that cash by inviting friends to sign up. Until you do so it pays 0 per cent.

It also has a “chirpy” chatbot interface that lets you know when it’s taken money and how much.

Connected Money

This app allows customers to see all their accounts in one place, assess where their money goes and see how much cash they will have to spend once their bills have gone out.

It’s powered by HSBC but can access data from 21 different banks, including savings, current accounts, mortgages, loans and credit cards.

To access this app, however, you do need an HSBC current account.

Bean

Another whimsically named app, Bean bills itself as “the future” of bill payments and allows you to compare deals on all household bills, cancel unwanted subscriptions and track payments across every account using a simple dashboard.

It’s like a bill management system and comparison website mashed together.

Bean can also cancel direct debits, allowing customers to stay on top of their recurring payments. As with other options it’s free and the company earns a fee if you use it to switch any services.

Plum

Using an artificial intelligence and communicating via a Facebook chatbot, Plum enables customers to save money out of their current accounts and begin investing it.

It connects to your current account or accounts and monitors spending patterns, setting aside an amount of money every few days that it has worked out is affordable for each user. Depending on the income of the account holder it typically saves between £25 and £200 a month.

Then there are investment options available if they want to move that money out of savings. On top of that it also helps customers compare and switch their bills to better deals.

MoneyBox

Several open banking apps promise to use clever algorithms to whip away affordable amounts of money every few days and save them. This app does something slightly different.

With MoneyBox, users invest their spare change by rounding up the cost of payments. So, when a customer pays £2.40 for a coffee, it rounds it up to £3 and invests the extra 60p into a pre-agreed investment account.

Customers have clarity about how much is being taken from their accounts and invested, because it consistently rounds up the small everyday payments we all make. The founders hope it will help make investing possible for people who have very little spare cash, through a series of micro-payments.