OPEN by Eliga August insights
In August, Eliga Services attended the Consultation Webinar on Version 3.1.9 of the OBIE Standard online workshop.
The workshop included many important updates to the Consent and Access Dashboards as well as amendments to API and MI specifications. The dashboard updates followed three principles:
- Easy to find and locate
- Intuitive to use and understand (with consistent naming)
- Be as transparent as possible
Appropriate consent parameters were outlined with specific use cases. For instance, when a savings plan has not been used for a period of time, this may indicate that a customer’s circumstance has changed. The Payments Initation Service Provider (PISP) will need to consider whether they still have the customer’s explicit consent. Consent parameters are at the core of open banking. These parameters link to Customer Experience (CX) and larger discussions about financial inclusion.
The consultation also covered Sweeping (the automated movement of money between two accounts) focusing on third party guidance when using Variable Reoccurring Payments (VRPs) for sweeping. Learn more about the v. 3.1.9 artefacts here.
Record-breaking investments in FinTech
Though recovery may be slow, the FinTech sector saw a record level in global VC investments, according to KPMG's latest report. The amount almost doubled from $22.5 billion to $52.3 billion in H1'2.
JP Morgan and Amex invest in Plaid
One of the biggest headlines of August was Plaid’s top up of its Series D financing rounds with some of the biggest names in Financial Services, JP Morgan Private Capital Growth Equity Partners and Amex Ventures. Crucially, the amount invested was not disclosed. However, it follows the initial $425 million Series D four months ago, which valued Plaid at $13.5 billion. While Amex is an existing investor, the addition of JP Morgan was a surprising development. Previously, JP Morgan’s CEO, Jamie Dimon claimed Plaid was improperly using data. However, Plaid maintained that the company’s focus remains on ‘ensuring people have access to their own financial information so they can securely share it with permission to use the fintech apps they choose.'
One raises $40 million for its ‘middle-class’ service
Finextra reported that the digital banking start-up, One attracted $40 million in its Series B funding round led by Progressive Investment Company. Former PayPal Intuit CEO Bill Harris founded the ‘middle-class digital banking service’ to target an underserved market segment, America’s middle class, who are stretched and dealing with financial stress daily. Harris believes this segment is unsupported by current offerings and hopes to challenge 'the antiquated practices and uncompetitive pricing of traditional banking products.'
The company launched in September 2020. The digital bank is 'built on a proprietary technology core delivering saving, spending, sharing, budgeting, and borrowing in a single account.' The bank’s product offers overdraft protection, an autosave feature, cash flow-based credit lines that enable borrowing as low as 12% APR, and a credit builder product.
Acacia uses open banking for good
Aussies can now sustainably build their wealth, thanks to Acacia's sustainable analysis tools that help users understand their carbon footprint and the environmental impact of their financial and energy arrangements. These insights show the power of using digital for good, a topic broached in FinTech Week London. Speaker, Chris Skinner acknowledged that the climate is one of the most important aspects of using digital for good, as it will impact our kids and grandchildren's future.
Acacia’s app is built on micro-service and cloud-based technology architecture, incorporating savings accounts, mortgages, and energy providers alongside sustainable spending analysis. According to Finextra, investment solutions are in the pipeline.
Acacia founder and CEO Anil Sagaram noted the importance of financial transparency and the ‘longer-term environmental impact of money management.’ Social values will become increasingly important to the company’s mission and focus.
CIBC introduces digital identity verification
The Canadian bank, CIBC launched a new feature to help new customers verify their identity when applying for an account, savings account, credit, or credit card.
To complete their application, customers must provide an image of a government-issued ID, as well as a selfie. Machine-learning algorithms verify the images. The new feature eliminates the need for customers to visit branches. This innovation removes some of the operational challenges faced by legacy banks, significantly reducing application time to a matter of minutes.
Video banking & self-service kiosks are here to stay
During the pandemic, many banks launched video calls, so customers could access their bankers. According to Sykes, 'Nearly two-thirds of US adults have either had a video call with a banker or would like to have one.' NatWest launched video banking appointments in 2020 to increase access to its team of bankers during the pandemic.
Similarly, several banks have introduced self-service kiosks with digital devices to their branches. Brick-and-mortar employees have been repurposed to help with more complex services from technical assistance to wealth management.
Join the conversation
Follow Eliga on LinkedIn. We'd love to hear what you think about OBIE’s consultation, as Open Banking reaches the end of its roadmap.