With the arrival of Open Banking, It is essential that Advisers understand the benefits and can overcome client concerns on data security to capitalise on this opportunity.
- Challenge for clients and advisers to understand the benefits of open banking.
- Opportunity to keep aggregated data in one place - which is a great opportunity for IFA’s.
- The result should be a more holistic discussion with the client.
- Open Banking allows true flexible banking, with all data being held in one place.
- In the past, Banks have always owned Client Data but the Payments Services Directive 2 (PSD2) has changed all that!
- The Competition and Markets Authority brought the implementation forward to Jan 2018 and included the requirement for Application Program Interfaces (APIs) which makes it very efficient and easy to use.
- Client Data can be provided at low costs.
Key issues and challenges:
- Advisers need to understand the concept and how it fits into their business models.
- Explaining what Open Banking is to clients.
- Addressing clients concerns on security of data.
- It takes time to set up the data and links required. The spending categories need time to understand/amend.
- Creating a client proposition and identifying types of Clients – suggested that it is not just for the millennials.
- Firms offering Open Banking need to be regulated.
- Linking new and existing technologies.
Conclusions and solutions:
- Open banking should make the IFA review process much easier.
- Advisers need to understand how the system will work in order to provide the level of reassurance to clients on access to private information.
- FCA are trying to educate the public on the benefits of sharing information.
- Fact finding should be much easier and will allow access to a greater level of detail.
- Partner with one of the specialist platforms to understand potential and business model integration.
- Advisers asked, and MoneyHub confirmed, that they offer a link to Client Portals and to CRM such as CURO, which uses the Microsoft Dynamics Platform.
- Because client data can be provided at low cost, this could open up other markets for advisers such as the younger generation.
- A delegate gave an example of one of the authorised firms who supply an Open Banking app where they offer the user the facility to round up on any purchases with the difference being added to a savings account of their choice One known user had saved £400 since the New Year!
- Payment Initiation will shortly be available where an Adviser will be able to set up a condition to identify where the saving should be invested and to be able to prompt the client.
Expert: Jon Hart - MoneyHub
Facilitator: John Chapman - Owen James Group, Paul Miles - Silverback Consulting