Open Banking Expo 2022 - Round Up

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The Open Banking Expo UK 2022 kicked off in October this year and did not disappoint.

The attendance of multiple companies in the open finance and open payments space were there to uncover new updates, innovations to the market and to hear current developments across the ecosystem whilst considering what the future of open banking might look like.

First up, David Beardmore, OBIE Ecosystem Development Director, sat down to talk to Michelle Atkinson, Head of Income at United Utilities, in a fireside chat to understand how open banking payments and account information services are transforming the UK’s utilities industry. 

David Beardmore was particularly looking forward to seeing the next wave of innovation in open banking, including variable recurring payments taking flight, which he believes will have a huge impact on how people pay for utilities. 

European open banking payments was another hot topic, with the conclusion being that it is struggling to reach its potential due to a lack of standardisation across the continent. According to Anupam Majumdar, principal of Flagship Advisory Partners, to expand the market, Europe should emulate the UK’s Open Banking infrastructure, which has allowed the country to become one of the global leaders in Open Banking.

In relation to Europe, many delegates were stating that real-time payments are becoming more commercialised and consumers are increasingly demanding instant confirmation of payments. That is why every payment has to be real-time. It has to be instant. If e-commerce doesn’t become instant in the near future, it will always lose out versus card payments.

Another topic of particular importance at the event was the introduction of VRP’s. A conversation around trust and the impact that can play for VRP’s. With the trust in the Visa and Mastercard watermark on cards needing to be replicated into VRP’s, to establish that trust and create awareness of the benefits. 

Mike Mann, finance director for Williams Trade Supplies, said: “Having the HMRC use case is fantastic, albeit it’s not absolutely VRP at the moment.”

Mann added: “From a merchant’s point of view, having a uniformed approach reduces the risk of dysfunctionality and will be really, really helpful.” Partnerships between banks, as well as increased levels of sweeping regulation, will be key to improving uniformity, which will in turn increase customer adoption, delegates heard.

Another focal point of the Open Banking Expo was the fact that they have teamed up with American Express to launch Women in Open Banking, a new industry initiative which aims to “help women rise up and realise their potential” in Open Banking and Open Finance. The initiative which has been heralded as a “world first” will address gender parity in the industry.

Sustainability and climate change was on the agenda as well. Speaking at the Open Banking Expo in London, last week, Erik Stadigh, co-founder and CEO of Lune, said environmental issues, and sustainability more broadly, could help businesses harness a major growth engine fuelled by customer expectations. 

“More than 70% of consumers want a green payment method,” said Stadigh. He said, while it didn’t yet exist, in the mainstream at least, it proved an opportunity for someone seeking to tap up a large section of the market.  

Confidence, customers and cash flow in Open Banking for retailers was another talking point with Mike Chambers former CEO of Bacs in the UK, addressing attendees. Advising disruption was coming to both the high-street and online shopping – and it would help retailers improve customer experience.  “Speed and security” he said are key to facilitating a good customer experience, referencing the evolution of payments for merchants whilst outlining a major pain point for merchants.  

“From the retailer’s own business perspective”, Chambers said “account-to-account processes could also boost and assure daily cash positions, which would contribute to more accurate cash flow forecasting.”

Finally, the growth in Authorised Push Payment (APP) fraud was discussed along with how the Open Banking and Open Finance industry can create intervention opportunities. With the proliferation of APP scams growing at concerning levels compared to the growth rate of traditional card fraud, there was a conversation around what could be done. (APP fraud occurs when a customer is tricked into authorising a payment to an account controlled by a criminal)

Anna Roughley, Head of Insight at Lending Standards Board (LSB), said that the sophistication of this social engineering is such that the industry needs to think about enhancing its existing education programmes.

“Scammers and criminals are creating a burning platform for the customer at that point in time to make them unable to think rationally. An effective warning should get someone to pause and stop when going through a transaction.

“That customer is often convinced it is the right thing to do. All they want to do is make that payment. Sometimes any friction can even be a source of high frustration for the person making the payment. We need to look at how we can intervene in that process. The customer needs to be educated and have an opportunity for intervention much earlier in the process.”