Chair and Trustee, Open Banking Implementation Entity
With many of the UK’s households facing the challenge of rapidly rising costs, understanding how to make your money work harder is key.
In contrast to the impact of pandemic lockdowns, which saw marked increases in personal savings, we now face a significant inflationary pressure.
Financial data could help unlock better deals
Typically, your financial data sits in your bank account. Open banking technology lets you safely and securely share the data with regulated financial firms.
Analysing that information — earnings, expenditure, regular bill payments, etc. — enables these firms to identify opportunities where you could manage your money better or access better deals. There is no catch — consumers and small businesses choose who they want to share their data with and when to stop sharing it.
Account dashboards provide a complete view
Instead of having financial information scattered across different accounts and providers, account dashboards let you see all of your accounts — bank accounts, credit cards and savings — in one place.
Having a clear, categorised view of spending over time not only enables a better understanding of your finances but also lets you know whether you are utilising all the benefits available. It allows you to act on upcoming overdraft charges, overspending or wasteful expenditure (such as unused gym memberships or duplicate subscriptions).
A majority (64%) credited the apps with helping them stick to a budget.
Apps can help you save frequently
This could be in the form of savings ‘round-ups,’ which monitor your regular spending (such as a coffee or supermarket shop), round it up to the nearest pound and then move it to a savings account.
Saving apps calculate what you can afford to save each week or month (you have complete control over the amount and frequency). They can easily move the money from a current account to a savings account to accrue more favourable interest rates. Similarly, if your circumstances change, you can just as easily lower or cease the savings amount altogether.
Open banking improves financial outcomes
Our research found that using these apps helped to build confidence in money management and financial decision-making and motivated users to engage more effectively with their finances. A majority (64%) credited the apps with helping them stick to a budget.
With more than 6 million of the UK’s consumers and small businesses already using open banking for better money management, it is becoming a key tool to help navigate their financial lives.