Open Banking integrations - your thoughts

We’ve had a few comments on social media and via questions to customer service on this topic, so I thought it might be good to have a conversation about what your priorities might be for Open Banking developments with your account.

Two kinds of Integrations

Adding information to Dozens

At this stage, Dozens itself is still developing and launching our own new app features, so we are not focused on bringing IN data from other accounts using Open Banking integrations.

If we were to start doing this, what sort of integrations would be of most interest and value to you?

Sharing Dozens account information to other apps

Your Dozens ‘Spend’ data is available to be shared with third party apps, so you can check your balance on other apps should you need to do this.

This requires approved access to our API, so it is secure, and then you will be able to manage this for your own account. This facility is new and being tested, but we will hopefully see new instances of this in the near future.

In practice this is something that has to be carried out by the other app - they have to design a tool to connect to us to collect your information (with permission), so you will need to raise this with any other apps that you use. However, we would be interested to know more about what tools you use and how you see this as being useful for you.

Here are some links to previous discussions on this subject. You can add to the specific topics, or leave your thoughts here and they’ll be shared with the development team

2 Likes

I use Emma for aggregation so I’d be interested to see Emma connect to Dozens via your API.

But at the moment I don’t use the Spend aspect of Dozens. For 3rd party access to be useful to me it would have to also provide access to Grow.

1 Like

It’s important that Dozens should remain accessible to as many people as possible. Adding functionality to the platform, such as spending analysis of data imported via Openbanking, could be costly and likely to trigger the need to introduce monthly account fees. Existing aggregation platforms such as Moneydashboard, Emma, Yolt, Wallet, etc each address different customer needs. I would say the priority at @dozens should be to provide an API so that customers can decide their own aggregation platform.

2 Likes

From my perspective Dozen’s Spend Track Save Invest narrative can only be enhanced by using open banking to enable the app to aggregate data from other accounts, otherwise you are not seeing the whole picture. Just enabling Dozen’s data to be aggregated in those other platforms does not add to this but in my view actually detracts from the potential of the platform. Hope this makes sense.

3 Likes

I agree totally. It also implies that plugging in not only banking (for spend and save) but also brokers (for invest) would be really helpful.

One thing that I’m really looking for is a clear (and simple*) view of my total wealth. Take my current property value from Zoopla, track my debts (mortgage, credit cards etc) and my savings and current account figures and show me a graph and a trend line. And let me do some simple modelling on how to change it…

The challenge, as Monzo is finding, is making money on that. But (selfishly) that sort of thing would solve a big gap in my financial management.

(*A bigger post for somewhere else maybe, but one of the reasons I’m not using Dozens that much is that it’s just a little too busy, too overcomplicated. When Dozens v2 comes around, I’d love for the team to spend time in making it more powerful, but much more uncluttered or simple in appearance).

4 Likes

Yes, there is an issue that a very fractured fintech space allows for lots of niche services, but in fact makes life difficult, and potentially expensive, for individual consumers who then need to track many different sites to manage their personal ‘portfolio’ of spending, saving and investment accounts.

On the other hand, tools to integrate services are expensive to build and maintain as @4martin points out, so you could end up paying some kind of fee to keep them going (whether as a service fee or commission).

If you try to offer the services AND the integrations, then there will always be a potential benefit if, such as with Dozens’ model, the financial services complement what the customer is trying to do (build their future wealth and security) rather than are antagonistic to it (such as being based on making profits from credit instead).

Dozens wouldn’t do this simply to attract traffic or sell access to customers. Offering integrations with other accounts needs to make sense with the rest of the app and be about supporting customers’ financial wellness goals.

2 Likes

I consider myself to be pretty tech savvy and keen to partake in new tech… however, there’s just something about open banking that makes me hesitate

1 Like

The thing I love about open banking is that it is a way of fundamentally reforming banking. But that the choice is in customers’ hands - if you don’t want it, don’t use it. No compulsion.

I know what you mean, I think a lot of us have that slight uncomfortable feeling at the mention of it.

Do you know what that something might be for you? like maybe the providers? or the ‘bad rep’ social channels have been receiving a lot of attention for recently?

I would only be a very reluctant user, and only in very limited ways. On the one hand, if my credit card company knows I’ve got £x,000 in my savings they may be more willing to accept an application / give me a better rate or higher limit. That’s good for me, but may make it harder for people with less/no savings (who have a greater need for credit!) to get credit, or have to pay more for it.

People are already expressing concern that open banking will be used by lenders as a backdoor to detect applicants having taken mortgage/credit card holidays during Covid (which are not supposed to show up on credit reports).

I guess what it comes down to, is how much do we trust institutions to use the information to benefit all customers fairly? Its only sensible for banks to use this information to reduce their risks, but I don’t know if I’d have got my 2nd credit card as a student if Barclaycard had known how much of my student loan was spent in the pub :slight_smile:.

I think with the current levels of phishing scams around, having a consolidated portal of all my accounts just worries me as a potential weakness for information theft and identity fraud.

Perhaps my naivety is due to a lack of understanding of how the tools work. As it’s not something I’ve felt I need I must admit I haven’t really researched it.

This is an interesting take. I was coming at it from an account aggregation perspective.

Thinking about it like this is helpful. On one hand, regulators will need to make sure that no one is de facto forced to shared financial data (because otherwise no financial services). But conversely, I much prefer this model to the unaccountable, private credit reference agencies that scoop up our data. If open banking means their demise then that’s very welcome, in my view.

Convenience for the customer is the carrot, a loss of data-privacy is the stick.

I can see that having my credit card spending visible in my current account would be a useful thing (eg warn me when I’m about to spend more on my CC this month than is in my current account to pay it off…) . But I wouldn’t plug my emergency savings account into it - I keep that separate in my mind and if I saw it included every time I did regular banking I’m sure I’d spend it all on gadgets…

A stick to what end? Data owners’ consent is baked in - no one is forcing you to share data.

Any views on this:

Nobody is forcing a bank/building society/credit card company to lend me money either. As far as I know they’re free to ask for detailed financial information (eg statement copies), which as it gets wider adoption could include Open Banking being used as an ‘easy’ option to get lenders that information - people may click this without being clear exactly how much data they are handing over and what a lender may infer from it.

There have been specific concerns reported about lenders using this method to be able to detect payment holidays during Corona virus, which are not supposed to be reflected in a static credit report.

As far as CRA’s being antiquated and needing an overhaul, I couldn’t agree more. Just not sure this is the best alternative without careful controls.

1 Like

This reminds me of what happened with mortgages and the self-employed.

Originally SA302s were just one of the ways you could show income. HMRC didn’t regularly issue them, unless requested. Then banks decided they wanted them from everyone. If you want a mortgage now, you’ve no choice but to provide. HMRC now issues then automatically too!

I can see exactly the same thing happening with Open Banking. You want a mortgage? No problem - give us all your data. And arguably it is in the customer’s interests, as the mortgage is more likely to be appropriate for the customer, the more data the bank has…

SA302s work pretty well though I think?

They give the lender an official document showing a high level overview of all of an individual’s income - nice and simple as people increasingly have > 1 source of income (2 jobs, self-employed side-line, investment/property income etc). There are no specifics of cash flow, what/where you’re spending money on etc, if you dip into your overdraft more than they’d like in December etc etc…

It also has the side-effect of penalising those who may under-declare their income for tax purposes.

If lenders suddenly start being able to account for every penny you spend, that could be pretty messy - especially early on when any decisions they make would be based on little more than guess-work.

My first mortgage advisor tried to tell me I had to get 3 years accounts signed off by a chartered account to get a mortgage. I pointed out that in the terms of the one he was advising it said I could borrow at a lower LTV (a whopping 0.5% less!), and just send SA302s. He wasn’t happy - assume he had a mate lined up to do my accounts. Anyway, that’s why I’m pro-SA302s :slight_smile:

Oh yes, they’re very convenient. I was commenting more on how they became a default requirement overnight without anyone, HMRC included, being prepared for it.

Without some forethought about open banking, I can foresee a similar unseemly scramble with much more far reaching consequences.

Rules that restricted lenders to this and/or separated checks from lenders, such as the outsourced credit checks estate agents do for renters that provide a “yes/no” without details, would be a start.

1 Like

The difference here being that if the customer has accounts with multiple banks, they could hand over all of the data for one of their banks, but not the other(s). How would the prospective lender know that the customer hasn’t given them the full picture?

Given that any debt will be available to them via your credit report, you’d only be hiding assets. Not the best way to convince a lender you can afford to repay a loan/mortgage…