Author: Simon Cadbury
In an effort to shake up competition in the financial services industry, the Competition and Markets Authority (CMA) has ordered high street banks to launch a technological “revolution”, offering customers the same services digitally, as they would receive in-branch.
Focal to this new ruling is creating Open Banking by early 2018, essentially giving consumers full visibility of more competitive rates, allowing them to compare deals and make informed decisions. These new rulings will ensure banks meet growing and evolving consumer needs and in turn promote healthy competition and standards between providers.
As part of this, banks will need to work to create one comprehensive, manageable digital banking platform so each customer can have a single view all of their finances. This represents a win for banking customers as the benefits of a single platform are clear: clarity as well as the ability to map and manage individual finances. Considering the recent EU Directive PSD2, which permits data sharing across multiple platforms, allowing consumers to check their bank accounts, bills and debts through a single digital financial platform, there is a recognised need for making money management easier.Banks need to work to create one comprehensive, manageable digital banking platform Click To Tweet
Our recent research confirms this need, with 61 per cent of young adults (18-24 year olds) stating they would feel more in control of their financial situation if they had visibility of all financial activity in one place. An additional 53 per cent also believe they would be able to repay all loans and debt more quickly if they had a single view of all credit and debit card statements.
It’s now important for providers to think carefully about methodology for providing customers with an open view. Many have commented on the launch of a new mobile app. However, the CMA is not actually advocating the building of smartphone apps as a remedy – rather the provision for data sharing. Downloading yet another app may actually be inconvenient for customers and the experience could be much better served from a traditional website.
Overall, the recent ruling from the CMA on digital banking represents a strong step forward for the financial industry, as well as a win for banking customers. The PSD2 directive and recent CMA ruling are initiatives designed to move the personal finance industry forward, as in our increasingly digital world, banks must continually demonstrate they are making their processes simpler and user friendly. The financial services industry has always been committed to promoting user experience and transparency, and can continue to deliver this thanks to evolving technologies such as the single digital banking platform.