The U.K.’s new Open Banking rules, which enable FinTechs to branch into the mainstream banking industry, are being held up as big banks delay making the changes.
According to news from Reuters, six of the nine banks that have to open up their data, so FinTechs can go after their customers with products and services, asked the regulator in the U.K for more time implementing the Open Banking rule. The deadline was Jan. 13, but the banks want an extension.
FinTech companies in U.K. told Reuters that because of the delay, they have had to put their plans on hold or remove them for good. “We have decided to postpone our Open Banking implementation until all the banks can prove they have ... all the required data available,” said Steve Tigar, CEO of app Money Dashboard, in an interview with Reuters.
Of the nine banks, Lloyds, Dankse Bank and Allied Irish Banks rolled out all the tech they needed to in order to enable data sharing with FinTech companies. Of the six financial institutions seeking an extension, some are hoping for a few weeks, while others want as long as a year, noted Reuters. Royal Bank of Scotland, HSBC, Barclays, Santander U.K., Bank of Ireland and Nationwide Building Society all have inquired for more time to make the necessary changes.
With concern growing that the new Open Banking regulation could hurt bigger banks — to the tune of 6 percent to 10 percent of revenues — it’s not surprising that some of the banks are taking a slower approach to meeting the deadline.
“There’s very little incentive for (banks) to play ball with this, because it’s just a pure downside scenario,” said Steve Graham, founder of FinTech firm Teller, in the Reuters report. Meanwhile Paul Rippon, co-founder and deputy CEO of Monzo, the digital bank, said his company has made a “conscious decision not to rely on open banking in the immediate term.”