GRAY: We're expecting legislation around open banking in the June time frame. There are still some questions about the scope and the implementation timing of open banking as a first salvo to open data but I think a reasonable man would say within 18 months we will be sharing some form of personal customer information.
Maybe just retail customers first; maybe also small business customers. Indeed it could go as far as large as institutions - although we believe most large corporates have reasonably sophisticated information sharing arrangements already.
The scope and the implementation timing are still to be determined but any way you look at it, we need to be getting ready now for a number of things.
So firstly we need to be able to share the data with the customer and their designated recipient. And secondly we also need to be in a position to receive that data back in a couple of different ways.
Really importantly we need to put ourselves in the position of being an Amazon or Facebook and say ‘if we had the data we have and then we also got customer financial data, how quickly can we provide them with a really compelling alternative to some of the products and services they currently get from a bank?’
I think being able to inject that level of urgency into the team’s thinking, which says ‘we are used to the data we see today but we are not necessarily across or aware of the vast and deep pools of data that some of our competitors have’.
Getting ready for that requires us to start thinking and putting plans in place now.
CORNELL: That’s an interesting point because when you hear any sort of any sort of discussion on the future of banking it's the banks seen as dinosaurs waiting for someone nimble and fast to come along and take what they have.
But Emma talks about how banks have to be in a position to receive data as well. It’s this idea of reciprocity, isn't it - you want to be able to both parcel out your data as required but also take in other data and use it to your advantage.
McCARNEY: Reciprocity is absolutely part of the ecosystem. It’d debatable about how it gets implemented – it will be a difficult one to legislate. It will possibly go down as rules - as opposed to legislation - or even possibly within standards.
It hasn’t been defined yet. The best result would be one which doesn’t strip any assets – data assets. You would not want to see that leak across other industries as the open-data movement goes in to energy, utilities and other industries.
This movement into open data needs to ensure companies are doing it for the right reasons; that have the right intentions and want to provide a better service and more-competitive product to their customers.
CORNELL: This idea of asset stripping - that's where the data is basically used by anyone for whatever purpose they like, rather than the consumer having much greater control over it?
McCARNEY: It’s more around the permitted use. What the whole framework is about is, based on a specific use case you can do certain things with the data. It’s about ownership.
There's a lot of nuance around that. We've got some way to go until June.
GRAY: There are two things we've been talking with the governments about and one is around whether there should be some financial billing model for the banks in sharing data because there is a difference between a once off ‘could you share my data with bank X’ for a specific reason and the ongoing and systematic sharing of data, which actually has a cost to it.
So there's some discussion - and again we have to wait until the legislation comes – over whether banks may be in some way reimbursed for it the act of sharing the data.
The only other thing I'd say on reciprocity is I think what it might look like is really clear for a utility company – it’s your bills over the last two years and the like - but if you're if you're a Google or a Facebook, what does reciprocity even mean?
The reality is it means things we don't necessarily believe they’ll want to give up. It's effectively your browsing history, right? That's their equivalent of financial transactions from our standpoint.
My view on legislation, be it open banking or elsewhere, is all about consumer-driven control over data and having data in the hands of folks who can use it well.
So for me the banks which can use data well - be it the data they have or the data they get through partnerships - that is the key distinguishing factor between those who will survive, do well and grow their customer base and those who won’t.
As banks move from a product-centric approach to customer centric approach I think if we can serve our customers better by knowing more about them and addressing their pain points we will have a very rosy future.
I do believe the banks that emerge from open banking and open data will be those who are passionate about their customers and can serve them with fantastic propositions.
For those who choose not to do that there will be a manufacturing role but ultimately the value will go to who understand customers well and can serve their needs. Do you agree?
McCARNEY: Yeah absolutely.
The real challenge for the broader business community - not just here but around the world - is one where people value their data to the level that they value their money. When that happens - when it actually gets on the balance - you will see a big change in the way people protect it, the way they resource it and the way they think about it strategically, as opposed to an afterthought.
That is an accounting change but it's one that will unlock an enormous amount of value on balance sheets and lead to a real tectonic shift in the thinking about what data actually is.
We've worked closely with legal firms and try to make that happen. We've thought about where this sits on the intangible-asset register.
We think if we can build the ecosystem it will benefit not only businesses but society in general.
Andrew Cornell is managing editor at bluenotes