Open Banking set to break UK account monopoly
Written by Chris Lemmon
The new Open Banking regime will help break the monopoly around customer account information, according to Alipay’s business development director for EMEA.
Speaking in a panel discussion at the Retail Business Technology Expo (RBTE) today, Tao Tao told the audience that he was optimistic about the developments in UK banking, with his part of the Alibaba ecosystem ready to offer mobile alternatives to existing institutions.
“In China we’re not a mature market like Europe, we don’t have legacy systems holding us back, so mobile is part of everyday life,” he explained, adding that the country has an estimated 80 per cent mobile penetration and $7-8 trillion worth of sales volume via mobile.
Also on the panel was Ian Rutland, chief operating officer at Optomany, who opined that since contactless came in, there hasn’t been a payment method that has had widespread consumer or merchant adoption. “Nothing has offered any real value added in the UK, so we should be looking towards Asia and how they use things like AliPay and WeChat - the value added from those services is phenomenal,” he stated.
“Banks move at a snail-like pace of change, and will therefore get disintermeduated. The chat here [at RBTE] a few years ago was all about the potential of them using big data, but in that respect they’ve got nothing compared to AliPay and WeChat, which can meet customer needs much more accurately and instantly,” commented Rutland.
“I just don’t think banks are very good at innovation - besides the likes of Tide and Starling who are breaking the mould.”
George Greer, business lead at Samsung Pay, cited the recent TSB replatforming problems as an example of legacy systems hindering innovation, suggesting Open Banking and PSD2 will “explode the marketplace”, with traditional players having to offer new digital experiences or be very competitive with cost if they are to retain customers.
Tao praised the history, branding and trust inherent in many of the European banks AliPay is working with, but agreed that legacy systems mean they are slow to change.
“From my perspective, those who can gain trust, roll out digital and satisfy customers with value will win out,” he concluded.