Many moons ago, in the late 90s / early 00s, I moved from India to Australia, and then to the UK. I used to bank with the same financial institution, and, luckily, it had operations in all three countries. When I moved from India to Australia, the India bank office sent my details to their Australia office, and within a few days of arriving, most surprisingly, I had my Australian bank account too. I mistakenly thought the same simple process would work for the UK.
For those of us who have moved to the UK from other countries, you know that to open a bank account here as a freshly arrived newbie in London is an up-at-dawn, epic experience that almost every foreigner goes through. Since I banked at the same bank in two other countries I thought to myself, “How hard can this be?” — Turns out, very!
Even though I had bank accounts with the same bank in two different countries, it wasn’t enough to open one with the same bank in the UK. It was quite the struggle. The legacy systems refused to read personal and transaction history to verify that I was already a customer; information entered in Australia or India wasn’t available in the UK; and banking staff worked off of different versions of systems and tools, which meant there was no simplicity or universality in banking data.
It’s 2017. One would think that a story like this would be history. But unfortunately, banking systems today remain clunky, inefficient and highly archaic. So thank goodness, someone’s decided to do something about it!
The next evolution of banking is here…
In January 2018, the revised Payment Services Directive (‘PSD2’) will be operational. Believe it or not, for consumers, this is an exciting time for financial services and banking — in no small part because the regulation provides for legally mandated data transparency across financial institutions.
Under PSD2, European banks will need to provide access to customer information (e.g. account balances and details) to regulated Account Information Service Providers (‘AISPs’), and banks will need to provide customer information and payments services to regulated Payment Service Providers (‘PISPs’). These elements will drive the banking world towards ‘open banking’ — a concept championed by the Competition and Markets Authority (‘CMA’) in the UK. As the CMA says:
Open Banking will enable personal customers and small businesses to share their data securely with other banks, and with third parties, allowing them to compare products on the basis of their own requirements, and to manage their accounts, without having to use their bank’.
This data exchange will be enabled through APIs (Application Programming Interfaces) — technology stacks that have to date been built primarily by FinTech startups, developers and technologists.
This is where TrueLayer comes in, and why I’m extremely thrilled to join the company as Chief Operating Officer and help Francesco and Luca to grow and lead the company into the future of consumer banking.
It’s all about friction and barriers
Now, traditionally compliance and back-office infrastructure haven’t always been the type of job most people run to. I’ve spent nearly fifteen years in compliance — in banking at Goldman Sachs, in the art world, at Christies, and later on in technology, at Apple and Stripe, building compliance tools. Compliance is fundamental to any organisation, and the fact that we can now build APIs and other engineering tools to ensure efficiency, simplicity and painless compliance is remarkable. I wish we had these sorts of systems when I first started my career.
Banks and financial companies have the option to resist change, and obfuscate Open Banking initiatives for as long as they can, or to adjust to regulatory changes, embrace a modern era of collaboration and adjust rapidly as current FinTechs can.
We believe building technology layers across platforms, geographies and boundaries will provide consumers with opportunity, competition, frictionless and convenient banking, without the hassle of dealing with banks.
Over the next few months, I’ll be focused on working with our regulators to get licensed; with partners and prospective customers to talk about all things API and open banking, and within our company to build a robust and scalable support structure. Additionally, given the dearth of digestible information about European-wide regulatory changes, I’ll be focused on building a community of entrepreneurs and partners to discuss and adopt these evolutionary consumer banking changes.
I’m extremely excited to get started and expect the next few months to be a rollercoaster!
At TrueLayer, I was lucky enough to find a team of engineers and product-minded people that help developers to build tools that easily access a customer’s bank data and ancillary services. If you’d like to be part of it, join us.
TrueLayer is part of a handful of industry and regulatory consultative bodies discussing PSD2, Open Banking and more. But we’d also love to hear about new initiatives and from partners, technologists and developers that would like to use our API. Feel free to get in touch.
Open Banking in financial services is just the first layer in our API stack. I look forward to sharing more with you all in the coming months as we bring TrueLayer’s solutions to other markets.
In the meantime, onward!