Member Article

There's an open banking revolution coming and these 20 FinTechs are going to help usher it in

From next January the UK’s largest banks will be obliged to share their data, including current account information, with third parties as part of a new European directive.

The second European Payment Services Directive, or PSD2, has been designed to crack open the big banks’ monopoly on customer data and payment services, and could unleash a whole new surge of FinTech innovation as startups and tech firms as a whole tsunami of open data is channeled towards new products and services.

The opportunities for companies operating in the space are massive, but so too is the scale of the task and the changes PSD2 will bring about to all aspects of banking once it is introduced.

In an attempt to map out and understand exactly what this brave new era might look like, innovation organisation Nesta has launched its £5m Open Up Challenge fund and has called on 20 members of the FinTech firmament to explore potential applications of UK banking transactions for small businesses.

Startups and tech firms including banking app Bud Financial, digital-only business bank Tide and business lender Growth Street are just some of the businesses who have received an initial £50,000 grant and will now compete for a share of the £3.5m prize.

The firms will now be given access to the Open Up Data Sandbox, a trove of anonymised UK transaction data which will support the development of their services and help shape how the landscape might look over the coming years.

Chris Gorst, Challenge Prize Lead at Nesta, commented: “We have been overwhelmed by the volume and quality of entrants for the Open Up Challenge.

“It’s encouraging to see how much energy and talent is focussed on fintech innovations for small businesses. We now have twenty teams who we firmly believe can build next generation services that will transform small business banking.

“By supporting these teams with financial rewards, expert support and access to the Open Up Data Sandbox, we hope to play a part in revolutionising a sector that has been slow to exploit new technology and respond to customer needs.”

The chosen 20

• Beyond Labs
• Bud Financial
• Coconut
• Credit Data Research Ltd
• DueDil
• Capitalise.com
• Fractal Labs
• Fluidly
• Funding Options
• Funding Xchange
• Growth Street
• Handle by Bizfitech
• Investly
• Iwoca
• Ormsby Street
• Runpath
• Solo
• Teller
• Tide
• Xelix

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