How Open Banking is changing the financial landscape: an interview with Kostyantyn Kryvopust

Date:

On the sidelines of the Money20/20 Europe conference, which took place this month in Amsterdam, UA2DAY had the opportunity to talk with Konstantin Krypopust – an expert in the field of international financial law.

  • Great Britain is known as the cradle of open banking in Europe. Please tell me how many members this ecosystem covers now?

First of all, we are in the early stages right now. Open Banking is six and a half years old, so it’s a very young category in the financial services industry – not just in the UK, but globally. Nevertheless, at the end of April, there were about 9.7 million users in the country. We have about 94 authorizations of neobanks using open banking and about 340 participants.

About 16.8 million transactions per month are now done using open banking for regular payments like taxes, utility bills, etc. You can also use open banking to buy premium bonds in the United Kingdom, and there are many other investment cases.

From a data perspective, open banking is ideal for managing personal finances. It’s about taking control of your finances, for example to control your spending or avoid late payment fees. This allows for better credit decisions in terms of affordability and eligibility. So, open banking changes the role of the account.

  • Everything sounds perfect. But are there any challenges?

I often get asked what recipe and what ingredients we use. I think one of the keys is taking into account the interests of a large number of stakeholders. You have the regulators, you have the government, you have the fintech community, the banks. And you have to be able to combine it. Not only do you have to make it work, but you also have to move forward and get results. That’s why I believe there should be a centralized organization empowered to take this forward. This is exactly what we have been doing for the past six years.

60 countries of the world are now implementing open banking. 48 countries chose the option with a centralized authority managing this process. From the United States, which is a completely open market to us, Ukraine, Brazil and other countries. A centralized authority must oversee all decisions so that experience is continuously delivered and adoption grows. And if some bank doesn’t believe that, you have to be able to change that, because trust is very important. You need to make sure your standards are up to date, you have the latest technology, the latest security protocols, etc.

And finally, the promotion of open banking is very important. SMEs, innovators, fintech players and even banks need to be informed about the opportunities that open banking can provide them.

  • This is very relevant for Ukraine, as we are moving towards open banking, but many banks and other financial institutions still do not understand the need for this.

It was the same in Great Britain. They need to understand that this is a benefit to their end users. They should focus on the final. If I were a bank, I would also use this opportunity, because banks get all the information about the customer, so they can improve their credit score.

  • Who benefited most in the UK when open banking took off?

The whole industry. I believe that everyone benefits from faster payment, whether they are an employer, an employee or a business. You want to get money faster, easier and cheaper.

  • Open banking is definitely changing the rules of the game in finance. What to expect next?

The next stage of open banking reveals its full potential. Its implementation requires a successful transition from the current competition remedy under the Competition and Markets Authority’s (SMA) Retail Banking Market Investigation Order to a long-term regulatory standard.

Achieving this would help the UK unlock the true potential of smart data, promoting market competition in a positive, sustainable and secure way, while empowering individuals and business owners and delivering better outcomes. In addition, smart data will help create a more competitive marketplace, enable data-driven cross-industry innovation, and help level the playing field for small and medium-sized businesses that are consistently left behind in the quest to bring finance and technology together.

Share post:

Popular

More like this
Related

The ambassadors of Ukraine and Great Britain organized a joint viewing of the Eurovision final and a charity auction

As reported by the Ambassador Extraordinary and Plenipotentiary of...

Events dedicated to the defense of the city of Mariupol will be held in Kyiv

On May 20, 2022, Mariupol was under complete occupation. On...

The band KOZAK SYSTEM will perform in Pirogov

A warm Saturday evening can be spent in a...