I can’t stress enough just how big a deal the UK’s transition to Open Banking is. The writer Wendy Grossman posted an excellent piece about this in her “net.wars” series recently.
She says…

The financial revolution due to hit Britain in mid-January has had surprisingly little publicity and has little to do with the money-related things making news headlines over the last few years. In other words, it’s not a new technology, not even a cryptocurrency. Instead, this revolution is regulatory: banks will be required to open up access to their accounts to third parties.
From net.wars: Regulatory disruption

As Wendy notes, Wired had published an excellent article about this (written by Rowland Manthorpe) in October. Having talked to some of the key players and explained some of the key concepts, he draws an important conclusion, which is that Open Banking is not “just a technical fix, or even a solution specific to banking, but a new way of dealing with the twenty-first century’s most sought-after resource, personal data”.
He is spot on. Identity is the new money. Banks are about to be transformed from places that store Sterling into places that store Digital Identities. Gone are the days where households hold valuable demand deposits with their banks. Now, this is hardly a new idea and it isn’t only techno-crackpots like me who keep going on about it. Banks know this to be the case, they just haven’t done anything about it yet.
Back in 2014, the Financial Times was reporting that “Britain’s high street banks believe their future role will be as repositories of more than just money: they want to be the safe place where customers store their digital identities”. This makes complete sense as a strategy and as the European Banking Association (EBA) white paper of the time puts it, “banks are well positioned” to be a crucial, supporting, positive part of their customers online lives.
Some others have also suggested that banks would let this slip through their fingers and hand digital identity to Apple, Facebook, Google, Amazon and Microsoft. Well, we’re going to start finding out in January, because I can’t help but feel that the major beneficiaries of the regulators pressure to open up the banks will not be nimble fintech startups but the internet giants who already have the customer relationships. Rowland speculates that Open Banking may expose some institutions to change and competition that they simply cannot respond to and that banks may well fail because of it.
This is the sort of thing that they must have been mulling over down at Open Banking Limited, the entity set up to implement open banking in the UK.

[Implementation Trustee at Open Banking Limited, Imran Gulamhuseinwala] doesn’t have much sympathy for failing banks
From To change how you use money, Open Banking must break banks | WIRED UK

Now, having sat next to Imran at dinner, I can confirm that he is one smart cookie (and a very nice guy too). He’s got a point about the competition that open banking should unleash.
Wendy’s words are well chosen; Open Banking is a revolution, and all we can say for sure is that there is going to be change. But as to who the winners and losers are… well, the UK is about to become an interesting, exciting and unpredictable laboratory experiment in banking regulation. In a year or two, we may at least have a signpost to the future of retail banking in place.


  1. Dave; You will remember full well that we started this journey before the turn of the Millennium- banks as purveyors and managers of Trust- banks as organizations who “hold data about” and “vouch for” the identities and attributes of their customers. We started that journey with a global footprint under a Common Law based Operating Ruleset to which all adhere to and thru which Liability was (and is) managed. Liability being the fellow traveller of Trust (you can’t have one without the other)…..We also started that journey in the B2B and B2G space.
    Now, as you indicate, Open Banking is in theory UK geographic in reach, and is a consumer/retail focused exercise…with attendant issues re Liability management. BW JGB

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