The Open Banking initiative is widening choice and removing monopoly power, according to a key industry figure.
Andrew Bloom, CEO at Masthaven (pictured above, middle), and Graham Olive, deputy CEO at OakNorth Bank (right), extolled the values of the open banking scheme and the adoption of application programming interfaces (APIs) during the CPD-accredited ‘Banking today’ conference at the Finance Professional Show last Wednesday (8th November).
Victoria Bateman, general manager at RFi Group EMEA (left), chaired the discussion – which was sponsored by Specialist Banking – and asked the two industry experts about the potential use of APIs in financial services.
Andrew explained that brokers working for customers could go to a variety of different website sorters and enter the necessary data themselves, or pick up the phone to a business development manager to obtain details on the best deals.
“Or you can fill in one lot of information, send it out via APIs and then the lender comes back to you with ‘yes, we will offer terms on this client and our rate will be this, our terms will be this’,” said Andrew.
“…Then you can have firms like Masthaven who are putting in place APIs, who [then can] get [brokers] far better information.”
“[An API] hugely increases your efficiency and gives the customer broader choice.
“Because in reality, there [are] only so many lenders any broker can phone up and get terms from on any individual case.
“So, I think there has been marvellous progression in using technology to enable a better product for the customer, and I’m seeing more and more brokers – especially B2B brokers – putting it in place.
“And we ourselves are running pilots with a number of them.”
Graham added that anything that combated the inertia in banking was a fantastic initiative, but admitted he had some reservations regarding surveys which showed people were concerned about cyber security.
“But … for us, it’s not about there being one solution, it’s about having many different solutions that all contribute to breaking what is a £250bn market and, so far, everyone has been chipping away at the edges.
“So, gradually we are seeing more and more momentum, and this is going to be part of that.”
Andrew added: “It’s an industry [in which] you are opening up choice and you are removing monopoly power, and not the opposite.”
Graham concluded: “By aggregating all that data so that everyone can have the benefit of it, that should create a level playing field for more competitive financing for everyone.”
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