Open Banking Expo has returned to the UK in 2022. Consisting of nine stages, over 40 sessions and boasting more than 90 industry expert speakers, the event hosts a large number of members of the financial community to discuss everything open banking.
During a time of economic and political turmoil in the UK, many leaders in the open banking industry met to discuss how open banking can help. Topics under discussion included the future of open banking and the challenges facing businesses in the industry before they can achieve their goals.
Todd Clyde, CEO of Token, opened the conference at the Business Design Centre in London with his session: ‘Keeping ahead of the curve: Can open banking deliver the Uber payments experience?‘.
Clyde spoke on the consistent growth and adoption of open banking in the UK: “Open banking payments in the UK are consistently growing 10 per cent month over month. This might seem slow from our perspective, but from a payments perspective, that is very fast growth. There are over 6.5 million payments just to the 17 brands of the CMA 9 banks being done every month.”
He also offered his view on whether open banking is a threat, or an opportunity for companies in the payments industry: “A threat if you do nothing. Medium [threat] if you simply aggregate them. I think it is a real opportunity if they actually launch their own, private label, pay-by-bank capability.”
Open banking payments
Following this, Daniel Globerson, head of bank of APIs at Natwest Group, moderated a discussion to continue the conversation around open banking payments, VRPs and sweeping.
- Charlotte Bell, corporate and institutional open banking payments sales lead at Natwest, said: “Banks can now start commercialising the APIs that they have been working really hard to surface to third parties today.”
- Mike Mann, financial director at Williams Trade Supplies, offered a merchants’ point of view: “The closer we can get to the ‘Uber’ ‘walk out of a cab’ experience, or ‘walk out of a shopping centre’ experience and complete your transaction with zero journey, the better. If we can achieve that at a lower cost for the merchant surely everyone except our friends at Visa and MasterCard win.”
- Charles Damen, chief product officer at Token, discussed the role of regulators in the industry: “We see in Australia, for instance, where they’re trying to get ahead because they know if they don’t make moves, then the regulator will come in and force them to, by actually pushing it forward. The banks then found the commercial incentive to make this a better opportunity than if the regulator makes them act.”
The future of open banking
Another stage saw a fireside chat moderated by Ellie Duncan, head of editorial and broadcast for Open Banking Expo. She spoke to Andy Sacre, product director of open banking decisioning and analytics at credit bureau company Equifax, on the topic of: ‘The future of open banking – a world beyond simple credit decisions‘.
Sacre spoke of the necessity to raise awareness around the benefits of open banking: “I think the problem is probably all of us. Controversially, we’ve got to message this to customers and to people in a way that they understand that it’s meaningful for them. Asking the question ‘do you want to use open banking?’ to most people on the street, you’re not going to get a decent response.”
Open banking supporting SMEs
Elsewhere, another panel moderated by Jamie Leach, domain lead for regulated data at Cuscal, discussed how open banking is enabling fintechs to better serve SMEs with a panel.
Panel member Connie Castra Feijoo, a stakeholder engagement specialist at Open Banking Implementation Entity, said: “If our goal is to enable fintechs to better serve the SME market, there are lots of examples of products and services that are currently live today which are actually helping SMEs be more productive, more profitable and more resilient. Especially during this crisis.
“Our latest research, for example, interviewed over 900 SME’s and 84 per cent of them agreed that open banking cloud accounting services are supporting them to drive performance to get a better insight into their business. We know that 50 per cent of SMEs currently use open banking. There’s a lot to do to get that in as well.”
Meet the CEO
The Fintech Times‘ own journalist Tyler Pathe took to the CEO stage at the event. He spoke to the likes of Gavin Shuker from Cardeo, Ola Atose from KoinKoin, Carlos Figueredo of Open Vector, Nilixa Devlukia of the Open Finance Association and Katrin Herrling, CEO of FundingXChange.
Gavin Shuker spoke on what Cardeo can do for people alongside the current state of the economy in the UK: “In July of this year, borrowing on credit cards rose to its greatest level for 17 years. Average interest rates are peaking at around 29 per cent. We know from previous recessions, that one of the biggest markers in the credit card industry is all of those promotional periods… What we’re trying to do is build a business that is inherently socially responsible.”
Rounding the CEO stage off, Katrin Herrling spoke about how the detrimental political and economic events in the UK have impacted the SME lending landscape. “Lenders are not going to give money to businesses where you can’t quite predict if they will be around in 18 months… The ability of finance has become more restricted and more expensive.”
Herrling continued: “Small businesses have been in the eye of the storm; the real challenges are becoming very clear and we are very concerned about what 2023 will mean for the lending sector.”
The challenges of implementing CBDCs worldwide
One important topic that came up a number of times across sessions was what the future may, or may not, have in store for central bank digital currencies (CBDCs). This panel saw insight from:
- Nilixa Devluki, CEO of Open Finance Association
- Lee McNabb, payment strategy lead at NatWest
- Louisa Murray, chief operating officer at Railsr
- Jannah Patchay, policy lead at the Digital Pound Foundation
- James Pomeroy, global economist for HSBC
Pomeroy spoke on the potential future of CBDCs and how central banks are tackling the issue of integrating it into the lives of the masses: “What seems to be happening across the world is all of these different central banks who are looking [at CBDCs] for different reasons, are are coming together on a roughly similar idea. You get a central bank digital currency that’s produced by the central bank is distributed to the public via partner banks. [As far as adoption is concerned] no one will even notice.”
James also discussed the ‘endless’ possibilities for interest rates should different central banks look to set some. While setting no interest rates is a possibility, as with cash, he argued the possibilities have to be discussed. He said that “a high-interest rate would encourage quick spending and less saving. The central banks could set an interest rate of 10 per cent on the first £1000 you hold, then a negative 10 per cent interest rate on everything over. This would make sure that people don’t have a lot of savings and are continually spending with income.”