While members see the opportunity to empower customers via Open Finance, they also raised the following areas of concern:
Disintermediation - There are concerns that Open Finance poses a potential threat to traditional mutual organisations by purely focusing on price and increasing disintermediation. Given the majority of building societies and credit unions have a high street presence and are deeply connected with their local communities, there are also concerns about the impact this effect could have on customers who do not want to operate their finances digitally.
Lack of trust in digital services - There are also concerns that it runs the risk of focusing on specific digital services and solutions rather than addressing underlying structural problems, such as a lack of trust in digital services among consumers. FCA support of the establishment of digital identity and verification (digital ID&V) standards and promoting these to consumers could be one option to consider.
Pan-industry approach on API standards - The Call for Input mentions the work of other UK industries and Government to open access to data, such as the department for business energy and industrial strategy’s (BEIS) Smart Data report. Some members have highlighted that they would be keen to see Open Finance as part of a pan-industry approach to opening of data rather than a separate standard setting body within financial services. Given the high cost of setting up Open Banking, this would also be a means of spreading costs across sectors and leveraging expertise.
The full response can be found here.