# It’s time for open banking to open up
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2020-10-08
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: Open Banking: The Future of UK Retail Technology Revealed
Meta Description: Discover how Open Banking is revolutionising the UK retail industry through the innovative cashback app Recash, offering consumers new ways to manage their
URL: https://financedigest.com/its-time-for-open-banking-to-open-uphtml

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_By_ **_Sara Korchmaros_** _is CCO of the retail technology platform_ [_Recash_](https://recash.app)

In January 2018 the Competition and Markets Authority quietly announced an initiative that has since shaken up the way UK banks hold customer data – and who has access to it. That initiative was called Open Banking. Today, two and a half years on, it is on the cusp of living up to its potential.

Open Banking modified the strict rules that govern the use of bank customers’ financial information. By granting limited access to this data to trusted, and vetted, [third party](https://www.financedigest.com/why-a-replacement-to-third-party-cookies-is-key-to-post-pandemic-recovery.html "Why a replacement to third party cookies is key to post-pandemic recovery") businesses, it sought to spur the creation of new products and services that consumers would find useful.

Before the introduction of Open Banking, it’s safe to say the [banking industry](https://www.financedigest.com/enabling-decision-making-success-in-the-banking-industry-3-considerations.html "Enabling decision-making success in the banking industry – 3 considerations") was not famed for its innovation. That’s not to [say innovation was not happening](https://www.financedigest.com/who-is-stormy-daniels-and-what-did-she-say-happened-with-trump.html "Who is Stormy Daniels and what did she say happened with Trump?"). The shift to chip and PIN, and then on to [contactless card payments](https://www.financedigest.com/fingerprints-and-tag-systems-collaborate-to-offer-contactless-biometric-payment-cards-globally.html "Fingerprints™ and Tag Systems collaborate to offer contactless biometric payment cards globally"), as well as changes to ATM machines and the arrival of mobile banking, are merely the most visible examples of technological progress.

Since the Global Financial Crisis, successive UK governments have sought to inspire more competition in both the [banking industry](https://www.financedigest.com/how-is-green-finance-reshaping-the-banking-industry.html "How is green finance reshaping the banking industry?") and the wider financial services sector.

A decade ago, London’s fintech melting pot sprang out of the nexus between City knowhow and Shoreditch’s tech entrepreneurs. Fuelled by thousands of overpriced flat whites, the two strands fused to create new and innovative ways to help people [manage and invest](https://www.financedigest.com/mg-appoints-former-head-of-axa-investment-managers-andrea-rossi-as-new-ceo.html "M&G appoints former head of AXA Investment Managers Andrea Rossi as new CEO") their money.

[Open Banking](https://www.financedigest.com/why-open-banking-heralds-a-new-era-of-ecommerce-merchant-and-bank-collaboration.html "Why Open Banking Heralds a New Era of eCommerce Merchant and Bank Collaboration") was conceived as a way to extend that creative momentum further. Tech developers who registered as ‘Regulated Providers’ were given access to previously confidential banking data they could then use to [create innovative new products](https://www.financedigest.com/probiotic-soda-market-product-innovation-by-live-soda-and-lifeway-foods-to-create-exciting-growth-opportunities-reports-by-fact-mr.html "Probiotic Soda Market: Product Innovation by LIVE Soda and Lifeway Foods to Create Exciting Growth Opportunities, reports by Fact.MR").

Fast forward to [today and the results of Open Banking](https://www.financedigest.com/stress-testing-why-did-my-bank-go-bust-today.html "STRESS-TESTING – WHY DID MY BANK GO BUST TODAY? ") are everywhere. Consumers can see all their finances in one place, and the financial [services sector](https://www.financedigest.com/the-state-of-cybersecurity-in-todays-financial-services-sector.html "The state of cybersecurity in today’s financial services sector") is packed with new and exciting tech-led offerings, from budgeting apps to savings and investments.

But for all the huge strides made, it is fair to say that much of the [innovation has been centred on financial services](https://www.financedigest.com/accelerating-financial-services-innovation-with-the-promise-of-data-mesh.html "Accelerating financial services innovation with the promise of data mesh "). The original vision for [Open Banking](https://www.financedigest.com/why-poor-customer-communication-is-holding-open-banking-back.html "Why poor customer communication is holding open banking back") – to extend the benefits to other sectors – has remained largely unfulfilled.

Until now that is. Other sectors are finally starting to reap the rewards.

Take retail for example. This summer saw the UK launch of [Recash](https://recash.app/), a retail cashback app powered by the Open Banking freedoms that was originally developed in Hungary.

The free app has a simple, compelling pitch to consumers – it allows them to upgrade their [bank](https://www.financedigest.com/community-fintech-11onze-to-launch-el-canut-a-super-app-offering-universal-banking-accounts-and-digital-debit-cards.html "Community fintech 11Onze to launch – EL CANUT – a super APP offering universal banking accounts and digital debit cards") card into a cashback card. It takes seconds to turn any card into a [cashback card, which will automatically transfer money back to the shopper whenever they buy something from a participating store](https://www.financedigest.com/walmarts-long-lasting-challenge-luring-budget-shoppers-back-to-its-stores.html "Walmart’s long-lasting challenge: luring budget shoppers back to its stores").

For retailers, the [technology is an ally that combines detailed information about individual consumers’ finances and spending with the ability to run precision-targeted cashback promotions which can be used to prize customers](https://www.financedigest.com/banking-from-anywhere-embracing-technology-to-exceed-customer-expectations.html "Banking from anywhere: embracing technology to exceed customer expectations") away from rival stores.

Though anonymous, the data the app collects through Open [Banking gives](https://www.financedigest.com/russian-central-bank-gives-legal-entities-green-light-to-trade-foreign-shares.html "Russian central bank gives legal entities green light to trade foreign shares") stores a panoramic view of individual consumers’ tastes and spending patterns – including what and when they spend with rival brands.

Previously only tech giants like [Google or Amazon](https://www.financedigest.com/uk-to-examine-cloud-services-dominated-by-amazon-microsoft-and-google.html "UK to examine cloud services dominated by Amazon, Microsoft and Google") could get close to gathering such granular detail of consumers’ tastes, through their online search and purchase history. But Open [Banking is now enabling retailers](https://www.financedigest.com/the-power-of-digital-why-theres-still-life-in-the-traditional-retail-banks-yet.html "The power of digital: Why there’s still life in the traditional retail banks yet") of all sizes – both online and offline – to access, and act on, vital intelligence like this.

In many ways the UK’s [retail sector is going through an existential crisis akin to that endured by some banks](https://www.financedigest.com/how-effective-talent-management-could-disrupt-the-retail-banking-sector.html "HOW EFFECTIVE TALENT MANAGEMENT COULD DISRUPT THE RETAIL BANKING SECTOR") a decade ago.

Lockdown forced the closure of high street stores for several months, and even after restrictions were eased, strict social distancing rules have curtailed shoppers’ willingness to visit physical stores.

Several well-known high [street names have gone to the wall](https://www.financedigest.com/investors-eye-lower-wall-street-on-powell-nerves.html "Investors eye lower Wall Street on Powell nerves"), and even retail sector thoroughbreds like Boots, Harrods and John Lewis have closed stores or laid off staff.

But it’s not just bricks and mortar retailers who are struggling. Even though well over a quarter of UK [retail sales](https://www.financedigest.com/german-retail-sales-dip-more-than-forecast-in-august.html "German retail sales dip more than forecast in August") are now made online, online stores face a similar challenge of weak consumer confidence and an economy on the verge of an unemployment crisis.

Given the scale of the [challenges the retail sector currently faces](https://www.financedigest.com/how-to-overcome-the-current-challenges-facing-your-fintech-business.html "How to overcome the current challenges facing your fintech business"), it needs all the help it can get. Emergency [Government support](https://www.financedigest.com/where-do-small-businesses-turn-when-government-support-dries-up.html "Where do small businesses turn when government support dries up?") alone will not be enough, and the brands most likely to survive and thrive are those agile enough to adapt to consumers’ changing tastes and acute price sensitivity.

[Fintech innovation](https://www.financedigest.com/how-fintech-innovations-can-change-our-tomorrow.html "How fintech innovations can change our tomorrow") and Open Banking have transformed the financial services sector over the past decade. The financial sector’s pivotal role in the UK economy as a whole means this progress has delivered broader [growth](https://www.financedigest.com/italy-slashes-2023-growth-forecast-but-sees-public-finances-improving.html "Italy slashes 2023 growth forecast but sees public finances improving") too.

But now [it’s time for Open Banking](https://www.financedigest.com/its-time-for-banks-to-spend-on-digital-mortgage-journeys.html "It’s time for banks to spend on digital mortgage journeys") to deliver on its full promise, and spread more direct benefits to other sectors. As its potential is at last realised by retail and other sectors, [Britain’s battered economy needs](https://www.financedigest.com/21690.html "BRIGHTON, England (Reuters) – Britain needs to be more “clear-eyed” about the risks") it like never before. Its coming of age can’t come [soon](https://www.financedigest.com/stocks-shed-gains-treasury-yields-jump-as-fed-signals-rate-hikes-could-come-soon.html "Stocks shed gains, Treasury yields jump as Fed signals rate hikes could come ‘soon’") enough.


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