At our recent event at our London headquarters, we welcomed four industry experts to the stage to discuss all things Open Banking and give a wider view of the state of the sector in the UK.
Ellie Duncan, Head of Content at the Open Banking Expo and Kieran Hines, Principal Analyst at Celent, joined our customers Trish Garrett, Product Manager at New Day Cards and David Marshall, Director at JS Group, to give their views on Open Banking and the ways it’s impacted their businesses.
The discussion was wide ranging and showed the huge opportunity that Open Banking represents.
Open Banking and the adoption curve
While Open Banking may feel new and unfamiliar to some, it’s clearly established its place in the financial ecosystem. Adoption is on an upwards trajectory, and all signs suggest that this trend won’t change any time soon.
Ellie Duncan, Head of Content at the Open Banking Expo, reported back the latest figures to our audience. “There were 11.32 million users of Open Banking in July alone, up 12% on the previous month. In total that month, 19.54 million payments were made.”
Trish Garrett, Product Manager at New Day Cards, explained that while getting customers to use Open Banking payment options for the first time may take a little encouragement, once they’ve taken that leap, they rarely look back.
She has seen a strong positive adoption curve for New Day customers using Payit to clear their card balances. “Once we had given customers that push, once they understood that this was a secure and simple way to pay, we saw them use it again and again. Adoption has grown steadily over three years.”
The ease and flexibility of the process has proved popular with customers who make the switch. “Once customers use the Open Banking journey, they don't tend to go back to using card payment.”
It’s not surprising that numbers are on the rise, as people begin to wake up to the benefits Open Banking can bring, particularly when it comes to payments. Ellie says “With payments we've got an opportunity to make life easier for people and for businesses: to make it easier to collect and send payments, improve security and speed and privacy.”
Easing the flow of payments
The speed and security of Open Banking has certainly helped David Marshall, Director at JS Group, to address customer pain points.
JS Group works with universities to make payments to students and other beneficiaries. These are often time sensitive, particularly in the case of hardship grants, so speed and efficiency are vital.
JS Group’s Aspire platform is powered by Payit, and David credits the Open Banking platform with delivering significant benefits to the universities who use the system.
“Universities are large organisations with complex finance operations. Payments can take a long time to be approved and sent, and there’s a lot of operational inefficiency in the traditional ways of making those payments.” David explained, “Payit and other Open Banking solutions, bypass all that complexity. So, what this enables is a much faster and more efficient business process. It enables delegation of responsibility to budget holders and the ability to deliver holistic support. Ultimately, it’s allowed us to provide the right form of support in the right circumstances, and to deliver more funding to more students across more universities.”
Visibility and control
Security and convenience are baked in to Open Banking. Kieran Hines, Principal Analyst at Celent, was quick to highlight the fact that a core principle of these solutions is to empower the customer, and put the control back into their hands.
“What's really important about Open Banking, in my view, is that it all rests on one foundational principle, which is that as a consumer, the ownership of your data rests with you. All the data about you and your behaviors, which is held by a huge number of different organisations, belongs to you, and it should be in your gift to decide who has access to that data, and that you give consent for that.”
While Open Banking solutions put control back into the hands of customers, they also help businesses to improve reporting and tracking.
David explained how the universities JS Group work with have benefitted from this feature. “With traditional payment methods, universities have little to no visibility of how the funding they provide is being used, so they're not able to connect it back into institutional priorities. Our Aspire platform, powered by Payit, has had a transformational effect on their ability to connect their investment to tangible outcomes.”
This has also improved the experience for the beneficiaries of payments made via Open Banking.
“The delivery of funding across universities can be quite opaque and difficult to understand. That’s only made worse by delays caused by inefficient processes. With the improved visibility and the experience we have in delivering financial support this way, we can really smooth the communication with students.”
Inspiring behavioural change
For Trish, one unexpected result of implementing Open Banking payments was a change in the ways that customers chose to approach paying off their card balances. By giving customers more flexibility and control over payments, New Day found they had enabled a behavioural shift.
From a customer perspective, they've really embraced the journey. We see more customers making multiple payments throughout the month. There’s behavioural change in that now customers will spend on their cards and then they'll make a payment, because they can now do it really quickly and they can pay back and increase their open to buy.”
It’s clear that the future of Open Banking is bright, and our panel of experts has already shown some of the ways in which it can deliver value for customers and businesses alike. As Kieran said at the close of the session, for businesses that embrace Open Banking, “the opportunities are almost endless”.
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