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Simon Taylor, co-founder and Chief Product Officer at 11:FS, joined us at FinTech Festival to share his insights on the future of Open Finance and the key differences between the UK and U.S. markets.
Many financial services executives in the United States tell Simon that we don’t have open banking here. But, according to Simon, we may have something better — open finance.
The main difference is between regulated open banking in Europe and market-driven open finance in the United States. Regulated open banking in Europe is actually just regulated open access to checking accounts for payments and data. But, the same doesn’t apply to savings, loans, or investments.
Imagine access to all financial product types and the space for innovation. Imagine the type of picture you could build up for my customer. Open finance is an area of opportunity to build better outcomes for customers. So how could you do that?
Simon breaks down these opportunities into three lenses:
Lens 1: Time - Past, Present, and Future
We used to simply look at a consumer’s past, especially when lending to them, in order to give them credit for the future. That didn’t work well for those who have never had credit before. Now, we add the present data and we can see what they're doing right now. But, we still want to see where they're going tomorrow — how their lives are changing and their payroll, and so on.
The more of a view you have of a consumer’s past, present, and future, the better outcomes you can create for them.
Lens 2: Context
The concept is simple: the more financial data that you, as a business, can get, the more complete picture you can provide to your consumers. If I have the data and the context of that data, what use cases can I build for my customers? The value to customers and financial institutions increases as you add context to the data.
Data by itself doesn’t provide value to a consumer who doesn’t understand it. We also need to cleanse the data so that it can be categorized and made “use case ready.” The most actionable data drives value and customer outcomes.
Lens 3: Audience
Rather than each financial institution or fintech focusing on only what they can do, change this picture and look at it through the lens of the customer. If data and value only flow one way, that’s a bad relationship for financial institutions and fintechs. But data CAN flow in two directions and the savviest financial institutions and fintechs will recognize this.
Ultimately, the customer just wants solutions that work and organizations want to innovate faster.
Open finance isn’t going away. It’s time for us to focus less on not being a bad landlord but instead focus on being a good waiter. The consumer wants to know who is going to help them solve a problem, and the way institutions can create value is by getting a complete picture of the customer's financial life. If you identify the tipping point in systems, you can change lives. We’re not competing in just the price of our service, but also in who can solve the most problems and drive customer outcomes..
Be sure to watch the full replay of Simon’s talk from FinTech Festival LIVE, along with keynotes from MX Interim CEO and President Shane Evans and Susan McPherson, Author of The Lost Art of Connecting.
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