Business banking platform Tide has accused the UK’s banks of dragging their feet on Open Banking, arguing for the introduction of data fees to incentivise the sector to promote wider uptake, according to Finextra.
In a submission to the Competition and Markets Authority review into governance arrangement for the new entity to take over from the Open Banking Implementation Entity (OBIE), Tide proposes removing the block on charging to access data imposed by EU legislation and thus creating a new market for paid-for premium data access services for large financial institutions.
Oliver Prill, Tide CEO says that the “slow uptake of Open Banking” has meant missed opportunities for both customers and companies who might have created new products and services.
“The slow uptake is the result, at least in part, of foot-dragging by some of the large financial institutions, who may have perceived Open Banking as more of a threat than an opportunity,” says Prill. „It certainly was an unwelcome cost to some of them.”
According to the recent OBIE Annual Report, only three million UK customers and businesses are using Open Banking-enabled products at the start of 2021, and account switching still remains low.
„Now that Open Banking is established, at least at a basic level, we believe its true potential is only likely to be realised if the high street banks are positively incentivised to participate,” says Prill, according to altfi.com
To be clear, Prill is advocating a freemium paywall where “basic free open banking access” should remain, only with additional layers of data being offered at a cost.
It’s not clear exactly how “modest” a cost would incentivise banks to better support open banking, however the suggestion is clearly a sharp change in direction to the founding principle of open banking as giving consumers better access to their own financial data.
Tide now has over 320,000 members, which it says is equivalent to 5 per cent of the SME banking market in the UK.