FINANCE
EXPERT COMMENT Eighteen months ago I was a data scientist in a payday loan company. I was dipping into my own overdraft every month and I thought I could create something to fix it. If you could get an Uber in a second or an Airbnb in two seconds, why couldn’t you manage your money the same way? Cleo is a digital assistant who connects to all your different accounts through Open Banking and helps you manage your money. You can chat to her and ask questions on Facebook Messenger just like a friend – she’s a companion in your day-to-day financial life, a bit like a financial adviser powered by AI, which people really like. With wages having stagnated, there’s a real societal need for young people to save and be in control of their
Open invitation It’s the ‘banking revolution’ that hardly anyone has heard about and many seem reluctant to embrace. Kay Hill investigates what Open Banking is all about and what benefits it might offer for those saving for a first home
money. Cleo will analyse your spending and balance history and work out how much you can afford to put away each week and then put it into a savings account for you. It’s a way of helping people to get started with savings; it can be apathy that prevents people from saving, but now you can auto-deploy your capital in the most efficient way.
Barney
As revolutions go, Open Banking has certainly been unobtrusive. Anyone who banks with one of the major UK institutions will have received a letter, but most, after reading it and coming away none the wiser, will probably have dropped it straight into the paper recycling bin. In fact, when consumer champion Which? carried out a survey a few months ago, 92% of the public had not heard of Open Banking at all, while a second survey by management consultancy Accenture found that 69% of those it surveyed didn’t think they would use it.
Hussey-Yeo Co-founder and CEO, Cleo
WHAT IS OPEN BANKING? In a nutshell, Open Banking means that the big nine current account providers (Allied Irish Bank, Bank of Ireland, Barclays,
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Danske, HSBC, Lloyds Banking Group, Nationwide, RBS Group and Santander) are now legally required to give access to a customer’s financial data to a third party – if the customer requests it, and if the third party is properly registered and authorised.
WHY HAS IT COME ABOUT? Open Banking was a result of the Competition and Markets Authority’s investigations into the banking industry combined with the Second Payment Services Directive from the EU, which came in to force in January 2018. These regulations are intended to ensure that customers’ data belongs to them, and gives them rights to use that information in ways that benefit them.
First Time Buyer April/May 2018
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20/03/2018 15:26