Open Banking Gives Consumers Control Over Personal Finances

According to the Institute of International Finance, the pandemic increased global debt to $281 trillion by December 2020 with US consumer debt rising to an all-time high of $14.88 trillion.

Now, Open Banking fintechs could offer one way out of debt.

For example, Tully is a budget management app that helps customers gain control of their finances. It uses Open Banking to gather relevant information related to user spends, from credit cards to utilities to broadband and leverages conversational AI to design a tailored financial plan. In March 2020, Tully launched a free payment relief service for people in the UK who were most affected by the pandemic.

Steve Bradford, co-founder of Tully and a guest speaker in our Oxford AI in Finance and Open Banking programme, says that “the launch of our Covid-19 Relief and Wellbeing Network, has been designed to ease the strain on our partners’ call centres and operations teams, whilst giving customers the support they need to help them make it through these uncertain times.”

Open Banking gives users control over personal finances

Leveraging key features of PSD2, like Account Information Services (AIS) and Payment Initiation Services (PIS), and technologies such as big data and AI, fintechs are crafting solutions that bring end-users a myriad of benefits and control over their personal finance management. Some of these solutions include:

• Centralised dashboard. Most users have more than one bank account and keeping track of them can be confusing. Astute fintechs are creating multi-account dashboards that can access all relevant information from different accounts, track cash flows, liquidity levels, generate reports and enable financial planning from one location.
• Micro-saving tools. Traditionally, saving entailed keeping aside a certain percentage of one's income, a challenging prospect for most. Many fintechs are innovating the idea of saving to include minuscule sums, down to a few pennies. By gamifying and incentivising savings with automated round-up pots, users are more prone to take action. For every transaction a customer makes, the round-up pot rounds up to the nearest dollar, pound or euro and saves it.
• Investment Bots. Investment bots access the customer’s gamut of financial data on an Open Banking platform to recommend tailored investment options and risk assessments that suit their specific needs. This does away with the need for an investment portfolio, which is inaccessible to an average user.
• Diverse Functionality. Fintechs are offering applications that can manage everything from tax returns to payroll, access to lending networks and donating to nonprofits. Having access to these different tools and functionalities at once is also improving customer experience.
• Green Fintech. Unlike traditional banks that have prioritised profit over values, many fintechs are giving users the opportunity to align their values with their investments. Fintechs like Aspirations, CarbonChain, and ReGal 38183 are giving customers the choice of investing in socially conscious, carbon-offsetting and environmentally-friendly products. 

There’s a vast distinction between a company launched to help people versus those crafted to extract value from them. Steve Bradford says that Tully was launched to “help the 23 million people in the UK who are worried about money.” The app won the ‘Best Fintech for Good' in 11:FS Pulse Awards in 2020.

Join Tully co-founder, Steve Bradford, in our Oxford AI in Finance and Open Banking Programme to learn how to innovate financial ventures that can improve the lives of millions.