Open Banking

Open Banking is a phrase that means very little to most consumers, but has the potential to dramatically change the way we bank.

The concept is that—with the user’s consent—banks can share data with other companies, and more recently, allow companies to initiate payments.

The ability for companies to access your banking data has paved the way for a whole ecosystem of money-management tools and data aggregators.

But what’s the experience of using Open Banking actually like?

The world of Open Banking is complex, so for simplicity, I’ll be focusing on what I believe are the two most important applications.

These two applications actually have different user journeys, as you’ll see in the case studies.

Firstly, how quickly could I go through these two flows with each bank?

What’s interesting here is both the speed of the challenger banks, and the consistency between both flows. For the incumbent banks, making a payment was a considerably longer journey.

But how are the challenger banks so much faster than the incumbents? Have they reduced unnecessary input? The answer is no, not really.

Largely, the banks all completed the journey within a few clicks. So how were the challenger banks so much faster?

This highlights an area we’ve seldom addressed in this study. Here, the speed advantage is almost entirely at an infrastructure level. Or rather: the challenger bank’s apps load faster.

How could the banks improve the experience of using Open Banking more generally? That’s what the rest of this chapter explores.

There's a theory that 5 seconds is somewhat of a magic number in software. Interactions, like elements loading, which take less than 1 second are fast enough for users to feel that they are interacting with it freely—or rather, they’re unencumbered by it.

Anything more than a second, and people’s attention will begin to waver. It’s a sliding scale up to 5 seconds, after which where they’re likely to have lost interest. I’ve perhaps over-simplified it, but that’s broadly the concept.

So, I measured how long it took for the app to load, including redirecting to the correct screen. For clarity, this includes authenticating with FaceID, so mimics a fairly realistic scenario.

And this is just the initial load—you’ll have another ‘waiting’ page at the end of the process, and possibly in the middle.

Let’s say I was starting a money-management app called “PokéMoney”, that used Open Banking to analyse a user’s transactions.

It wouldn’t be unusual for my company’s legal name—and therefore what the FCA recognise—to be different to my recognised brand name.

Now imagine somebody was going through the Open Banking authentication flow and it said: “You’re about to share your data with Cash Money Management Limited”—that’d be confusing, right?

Clearly it’s a better experience if you’re shown the far more recognisable brand name instead. So, which of the banks do this?

There’s a complicated infrastructure problem here, but the solution is fairly simple, and it’s technically available to every bank.

Plus, using this directory means that if a company was to rebrand, the bank wouldn’t have to manually update their databases.

When making a traditional online bank transfer, you have the option to leave a payment reference. This has a number of benefits, one being that you can identify and reconcile payments later.

However, you don’t get this option when spending money using your card—and for good reason; it’d be terribly time-consuming and a logistical nightmare.

But authorising a payment through Open Banking is basically a mixture between the two. It’s as quick as typing card details, and you could have control over ancillary information, like the payment reference.

So which of the banks let you attach a custom reference?

Why don’t more banks do this? I’m not sure. Perhaps it’s an oversight.

Let me describe a nightmare scenario: you’re casually scrolling through your bank’s app, you find yourself on the ‘Open Banking Connections’ section and notice that you’re currently sharing data with a company you’ve never heard of.

No disrespect to banking security, but this will happen one day. There will be a new type of scam where people are mislead into sharing their data, and these scammers will find a way to monetise it.

And when this does happen, it will be an intense moment of panic. Simply removing access is not enough, you’ll have a number of burning questions.

The good news is that there’s an easy UX win in this scenario—have a link saying “I don’t recognise this”, which addresses the above concerns really clearly, and helps them complete the next steps.

So what are the banks actually doing? Well, here’s Monzo—you can see how light it is on any kind of help. It’s built as a function, not as an experience.

There’s another issue with not having this kind of functionality, which will probably happen far more often: people will panic about legitimate authorisations that they’ve forgotten about.

Without this kind of information—and combined with my point about using legal names—a lot of people will revoke connections that they actually use, or maybe their accountants use.

But, there is something tethering the world of Open Banking more than any of the above, and it has got nothing to do with the banks themselves: permission to view your banking data only lasts 90 days.

After which, you need to re-authorise the connection.

The mass exodus of apps wouldn’t reflect your long term interests, but rather if you can be bothered to re-authenticate it now. Or perhaps you’re on holiday, or sick, or maybe you’ve lost your phone.

This churn of users is crippling the growth of Open Banking companies, and ruining the experience of Open Banking for many consumers.

My friends who run Open Banking companies often describe this as the biggest user-facing problem they have. And frustratingly, it’s nothing that they can fix.

I’m a big advocate of Open Banking, and have been for many years. In fact, I founded an Open Banking company, which I exited in 2018—probably one of the first Open Banking acquisitions made.

In many ways, it’s improved considerably in the last few years. But it still suffers from some of the major UX obstacles that it did 2 years ago.

I believe we’ll get there. Open Banking will continue to improve, until it’s so simple you don’t even know you’re using it.