Open Banking- Designing the future of finance

This short sentence carries huge implications for the high street banks. It means that on a customers' request their bank needs to release all their transactional data to a third party of the customers choice, providing the third party have met the requirements allowing them to handle it securely.

Open Banking has the potential to improve the financial status of millions of people

This is the first major shift in our relationship with our banks. For so many years we would choose our bank and they would handle our financial affairs directly with us. The ownership of all that transactional data was with our bank and they did little with it to help us or empower us. Now, with the introduction of the Open Banking API's the rules have been rewritten stating:

The data that banks hold about consumer’s financial transactions belongs to the consumer and NOT the bank. If a consumer wants to use that data to get access to better products they should be able to.

This has triggered a revolution in the banking industry and will change the relationship people have with their finances, their financial data and improve the financial status of millions of people who are currently excluded from many financial services. New, innovative products can now give consumers insights into their spending habits allowing them to gain more financial control and freedom. Many who have been unable to save will now be able to make small ISA contributions much easier and in a less impactful way, taking their first small steps to financial security. 

Innovative FinTech startups are taking advantage of the new opportunities Open Banking brings. These new TPP’s (Third Party Providers) are offering all kinds of innovative services using customers’ transactional data that the major banks never have. Giving TPP’s access to this data has lowered the barriers of entry to the finance industry and driven innovation like never before.

Customer experience is at the heart of the banking revolution

The startups have the unique advantage, they can think about the customer experience from the ground up, without any of the technical debt and operating inertia that have seen so little from the major banks in terms of customer innovation for so long.

This explosion of new FinTech start-ups has bought a human-centred approach to money management. Customer experience has now become the main battleground in the future of banking.

Previously customers were captive audiences, we chose our bank and visited their high street branches, or more recently logged in online and conducted whatever transactions we needed to. There was little incentive for banks to be truly innovative around the customers’ needs. Competition for customer accounts between the banks focused mostly on rate offers and customer service. 

Now however, customers have more choice, it is quite possible for someone to open a current account with a high street bank and only visit the branch or login online only in the most exceptional cases. The rest of their time could be spent on the Yolt app for example, making payments, getting insights into their spending habits and creating budgets accordingly. They can round up card transactions to the nearest pound and invest the difference in an ISA using MoneyBox, or use ClearScore to understand their credit rating and how to improve it. All this can be done without the need to interact with their high street bank.

This raises an important question for the major banks:

Where is the value in a customer to be found? where they hold their account or where they spend most of their time?

Experience Designers are playing a crucial part in building the future of finance

We are already seeing some great examples of putting the customer at the heart of the experience from some of the early startups taking advantage of Open Banking. These new interfaces are like nothing previously seen from our financial institutions. They make banking less intimidating, more fun and most importantly more engaging, encouraging repeat visits and a sense of control of ones financial future.

Let's look at a few in detail.

Moneybox is an app that accesses your transactional data and rounds up your purchases to the nearest pound, investing the difference in an ISA. 

Colourful and distinctive illustrations are warm and fun, making the topic of ISAs much more  approachable. The copy is distinctly un-financial and playful, even a little cryptic. It offers a Time Machine feature giving users a really quick way of instantly viewing how their savings will increase over time by investing a little bit more each month. If a user needs help there is an easy messaging service showing images of the staff that can assist them which immediately feels more personal than being held on the end of the phone. 

All the features are aimed at demystifying ISAs, offering clear insights and simple ways of making financial decisions.

Yolt connects to your current account and tracks all expenditure allowing users to create categories of expenditure and budgets accordingly.

The ability to very quickly understand expenditure and apply it to categories is Yolt’s strongest feature. It allows users see patterns and change any spending behaviour where necessary. The interface is simple and clear and insights are displayed using simple scrollable cards. Visually Yolt is bright and colourful using icons and logos to easily navigate the spending data and see common trends and habits. 

Yolt offers a service that any of the main high street banks could have easily offered their customers but for so many years have failed to do. 

ClearScore gives users insight into their credit rating and helps demystify how it is calculated and what can be done to improve a poor score.

This app is a treasure trove of useful information about credit ratings and does a huge amount of good in helping to educate and coach users on improving their financial status. The coaching section educates users on building a better credit score and fixing a low one. Social proofing techniques compares users credit report against the average in their area and the UK helping them understand where they stand. Scrollable cards show areas for the user to explore and useful hints and tips around their credit rating. Data is displayed clearly and tracks progress over time to encourage users to engage and take an active roll in improving their financial status.

ClearScore  is an incredibly thorough app and helps users to understand the mysterious world of credit ratings and how they are calculated. This is an invaluable service for those who often get turned down for credit and don't understand why or how to fix it.

So to all those Experience, UX or UI Designers that have made it this far I hope this short article has given you an insight into the opportunities that lie ahead. Open Banking has changed the face of finance and given designers an opportunity to make their mark on an industry that has been lagging behind in innovation till now. The many FinTechs entering the space is growing, and offering an engaging user experience is key to capturing the hearts and minds of new users and changing the way people bank forever.