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TransferWise – One Year Since Final PDS2 Deadline: What Have We Learned About Open Banking?

The latest news has shown that Open Banking has now reached an impressive 2m customers in the UK alone, and since the final deadline came into force a year ago, Open Banking has been front of mind for many fintechs. Lars Trunin, Head of UK Product at TransferWise believes the reality is that it’s still at the bottom of a long to-do list for many other financial institutions.

Lars Trunin, TransferWise

At TransferWise, we ran at Open Banking with all the enthusiasm you’d expect of an ambitious start-up. As a result, we quickly gained the largest share of transaction volume for Open Banking in the UK – at 70%. But not all of our integrations delivered the user experience we wanted, and we needed to make some significant changes to ensure our Open Banking processes delivered as they should.

It’s no secret that Open Banking has received a number of criticisms over the past year, and with that in mind, we wanted to take an opportunity to share some of the lessons we’ve learned, to help other businesses avoid some of the pitfalls.

Make the customer journey as simple as possible
When user journeys are designed by technology experts, it can be dangerously easy to see something as ‘obvious’, when in fact, it isn’t. One bank we worked with had two user journeys with a standard ‘login code’ and ‘re-authentication code’ to access open banking. These were not just the same length, but generated the same way. Confusion was rife among customers, and many dropped out of the flow completely. It might seem straight forward, but it’s crucial to look at your processes through the lens of a customer, and test appropriately,  to reduce the chances of creating something that’s more complex than given credit for.

Reduce obvious friction
When it comes to making payments, and moving money, customers want the easiest route to complete a payment. Anything that deters from that, without being a genuine security addition, is limiting the opportunities of Open Banking. We’ve seen some institutions overlook this, mainly in two forms: firstly with card readers, where customers can easily lose, forget, or have low battery on such devices. This extra effort can be enough to put a customer off from the outset, and at best drag them through a slow process where the additional hardware only adds extra steps.

Secondly slow and ‘buggy’ experiences, like security SMS codes or voice calls not coming in quickly enough, can be a huge deterrent for customers wanting to make payments via Open Banking. Customers have high expectations, and if Open Banking is more labour intensive, or less seamless, than their usual payment methods, it will only encourage them to find an alternative route to complete any transaction.

Make Open Banking front of mind, not an afterthought

The future of Open Banking is bright if the industry chooses to embrace it in full. Companies including Nationwide and Monzo have both done a great job of integrating Open Banking technology. Nationwide achieves a consistently high completion record for Open Banking transactions, similar to that of paying via credit cards. Monzo, on the other hand, has a reliable payment authorisation flow, and a very stable API. The key thing that both of these FIs have in common, is their investment into Open Banking. Businesses who want Open Banking to really work for their customers need to see it for the long term investment it is, and not a simple ‘add on’ that can be integrated without much thought.

As Open Banking continues to grow and develop, the industry could benefit hugely from more honesty, and transparency about things that are working and things that aren’t. 

The future of Open Banking is positive, but we need to remember why it was introduced in the first place, in order to fully embrace it. This regulation can serve customers better, and it’s our job to ensure it does that, as we become more familiar with the best practices.



  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

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