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Saturday, February 24, 2018

Opinion > U Account

Open season on Open Banking

Alex Letts, founder and chief unbanking officer of U | 4:56 Wednesday 17th January 2018

Reading the national media on Open Banking, I get the sense of an impending cock-up of England World Cup football proportions.

That is tragic with something so important and radical. If – as it appears – the technocrats are writing the consumer narrative, then that is a very bad idea indeed.

Cock-up 1: The proposition

The consumer proposition is being obscured by a lack of focus. I see a jumble of information, messages and incoherence in the media. This is a mirror reflecting the reality of the complex project. But that is toxic as a consumer narrative.

I would recommend that communication be focused on the single, initially deliberately vague, simple message: “Open Banking will gradually improve financial opportunity for many people in the UK.”

Cock-up 2: The bait-the-banks strategy

The fintechies smelt the blood of the banks with the PSD2 and Open Banking regulations, but such fervent negativity is unnecessary. Open Banking is a huge cost to the banks, and a potential threat to their business, reducing their control over customer data and access to it. They have their pain. Let it be.

Fintech focus should switch from bank-baiting to delivering real applications and meaningful consumer benefits.

Cock-up 3: Too much regulation

Does anyone really understand where PSD2 stops and Open Banking starts? Now, add General Data Protection Regulation, with draconian new data protection, permissions, storing and usage rules and you’re going to get potential conflict of regulations and interpretations.

Until this chaos gradually stabilises and clarifies, adopt a go-slow PR strategy.

Cock-up 4: Security

The banks have been told to share account data and have pointed out the inherent risks. So, at best, there is a grey area on accountability over data security. Even though data access is restricted to regulated third parties, consumer confidence in data protection is at rock bottom (and Meltdown and Spectre have fuelled the bonfire). Sharing more data simply magnifies risk, and consumers know that.

Right now is not the optimum moment to start promoting Open Banking aggressively. More beta testing is important here to make the security case more proven.

Cock-up 5: Targeting

After so much effort, Open Banking protagonistas now could see that their dream is greeted by indifference from the mass market.

Who is performing the segmentation exercise to target and build a marketing database of early adopters to build understanding and real-world evangelists for Open Banking?

Cock-up 6: Media backlash

Already there have been press articles appearing on the security risks, data risks, and financial and social exclusion that Open Banking will introduce. As with any innovation, the naysayers scream as soon as things go badly wrong; and things will go wrong.

Is there a well-briefed PR officer out there to be the first point of contact for any media to rebut, re-present or contextualise these events?

There is now a danger to the Open Banking project. It needs to be put in the hands of a skilled PR officer, with appropriate budget. If not, the possibility exists that important regulatory intervention and lots of complex work will end up wasted. It could easily become a victim of its own tongue-tied and incoherent narrative.

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