Frictionless Finance Report - Wednesday 20th May

We examine banks beginning to embrace digitisation, how APIs are critical for this to happen, and the continuing evolution of the bank-FinTech relationship
Published on
May 20, 2020
Finance & Fintech

Welcome to the Frictionless Finance Report, our monthly look at everything new in the world of Open Banking, FinTech, and consumer experience. If you’d like to receive this in your inbox, fill in the form at the bottom of the page. This month we examine banks beginning to embrace digitisation, how APIs are critical for this to happen, and the continuing evolution of the bank-FinTech relationship.

Open Banking

It has been well reported over the last eight weeks how the FinTech industry has stepped up to the plate in their support of both individuals and business. All of this support, whether in the forms of loans or other financial products has been made possible because of the development and subsequent use of APIs. 

Indeed in our conversations with some of the major banks over the course of the last two months, it has been clear to them that moving towards a new digital mindset, using channels such as Open Banking is a must, if they are going to survive in the current environment in which face-to-face meetings are all but impossible. Again, it is only because of APIs that this is even a possibility. 

While recognition of APIs is usually confined to the domain of technologists and developers, the response to global pandemic has aligned with Open Banking Europe publishing their new guidelines for the development of APIs. This has prompted a flurry of articles discussing APIs in this new Open Banking world.  

Open Banking Europe, in conjunction with a host of other regulatory bodies, including the UK’s Open Banking, has been working on the publication of draft guidelines for the specification of APIs to ensure there is commonality for FinTech’s and banks alike. The new standards are currently out for consultation with industry after being published last week.   




The difference that APIs can make to the modern economy is highlighted in Forbes, where writer John Kim notes that APIs allow you to connect to the services that you need, saving you the time and effort of building that functionality for yourself. It is for this reason that while Visa’s acquisition of Plaid earlier this year raised eyebrows for an eye watering valuation of $5.3 billion – this can be entirely justified when we consider what Visa will be able to accomplish with the new functionality that Plaid will bring. Kim writes: 

With most services now available in the cloud and ready to be accessed on our phones, orchestrated by a smart algorithm, we're only missing one thing: the ability for these services to talk to each other, share information and be strung together into experiences that make life easier and more convenient. That is why the API economy will continue to gain momentum.

Yolt’s Leon Muis writes in AltFi considering how Open Banking should be considered in the context of a digital strategy. The information that can be provided through APIs covers a wide gamut, from customer information and verification, data enrichment, customer onboarding to customer experience. He challenges readers to consider where in their customer lifecycle better understanding of data would be beneficial, and to use Open Banking and data APIs here.  

From the perspective of lenders and particularly brokers, an understanding of the API economy is crucial to offering customers the best possible service. In Mortgage Finance Gazette, author Stephen Walsh describes APIs as:  

The digital glue that connects different systems, enabling businesses to: better connect with partner clients and the whole ecosystem, reach new channels, monetize data and services, provide customers with digital and omnichannel experiences, develop platforms for partners, boost innovation and create viable products that reach the market quickly, enhancing the customer experience.

Finally, the security offered by the use of APIs in Open Banking is extolled by Simon Cureton, CEO of Funding Options in his piece for Open Banking Expo magazine. He notes that while the term Open Banking may be something of a juxtaposition, the “notion that the use of Open Banking will make companies more likely to fall victim to breaches is nothing more than a myth.” 

Best of the rest in Open Banking 

  • The Emerging Payments Association, which counts companies such as Mastercard and Refinitiv within its membership has released a new report on Open Banking.  
  • Open Banking can prove revolutionary for the accountancy sector, write FinTech Futures
  • There are lots of valid reasons to use Open Banking, but here are three good ones

Open Banking Abroad 

📊 Australia 

As a direct result of the Covid pandemic, authorities in Australia are to give smaller firms a further three months to make product reference data available. This pushes the deadline for the implementation of Consumer Data Rights (CDR) legislation from July 1st to October 1st. 

📊 United States 

In the US there have been calls for regulators to take more of an interest in the prospect of Open Banking becoming a reality. To date, some open APIs have been implemented, but these have come solely at the behest of industry. Moreover, there is recognition that where FinTech’s in the UK have been able to assist the banking sector during the Covid pandemic through Open Banking, that has not been possible in the United States. 

Stefano Vaccino, CEO of Yapily, said: 

In the current crisis, quick and easy access to capital, both for businesses and individuals, along with a clear understanding of the status of your financial situation, is fundamental. Open banking opens the door to being able to have both. To support the whole economy, the US regulator should accelerate the adoption of open banking across financial services.

📊 Brazil 

Brazil is to stick to its current timetable of making Open Banking live by November, despite delays caused by coronavirus. Open Banking should be fully implemented in the South American state by October 2021.  




On these pages last month, we duly noted the contribution that the FinTech community was making to helping business and individuals during this time of need. Over the course of the last month, we have begun to see more of a response from the financial sector. There has been an uptick in coverage on the response of the big banks, with most of it edifying. There remains however, concerns that some continue to drag their feet in the move to embracing digital and working with FinTech collaborators. and the Financial Brand note that where banks and FinTech’s have joined forces, the lack of agility of the banks has been highlighted as a major sticking point. They further state that 58% of banks continue to rely on legacy infrastructure which is curtailing their ability to respond to the pace of FinTech developments.  

The theme of banks becoming more customer-centric by embracing the work carried out by FinTech’s has been picked up by City AM. They write: 

Although banks are doing all they can to help businesses through the pandemic, standard lending solutions and practices are not geared towards SMEs, or the current climate. For example, identification checks can take months to complete, and funds distributed to successful applications may take even longer. 

In order to ensure the survival of the UK’s SMEs, the backbone of our economy, the industry needs to change its practices to make financial inclusion and lending for them a priority.

They outline how a shift in utility model can help banks become more responsive to the needs of small business.  

Finally, in an excellent slide deck, Benjamin Ensor of 11:FS walks us how Covid-19 has forced the rapid digitisation of financial services. With traditional customer onboarding turned on its head, millions of workers across the globe being laid off, and a global recession almost certainly imminent, financial services must consider how they can mitigate against falling profits and revenues by using digital services.   


There have been mixed reports on the fortunes of the UK’s neobanks following the outbreak of Covid-19. AltFi has noted the success of Starling bank in an interview with Founder Anne Boden, stating that the firm as yet has not furloughed any staff members and introduced a number of new innovative products designed around the impact of Covid-19.  

That said, research from Sifted suggests that new customer sign-ups have stalled at all the UK’s challenger banks, including Monzo, Starling and Revolut. It will, however, be some time, before the curtailment in new customers can be attributed to the global pandemic. A point noted by Forbes, who ask whether the Challengers are using Covid-19 as an excuse for poor performance.  



Best of the rest in finance 

💥 One Challenger bank that we will definitely not be reporting on again, is Bo. It is reported RBS have pulled the plug on the project. News from FinextraSifted and AltFi
💥 Contactless payments are becoming increasingly popular. The role of cash continues to diminish, and with that, comes increased questions about its future. News via Finextra and the Financial Brand.  
💥 The role out of Strong Customer Authentication (SCA) has been delayed by six months due to Covid-19 to September 2021. News via Finextra and techworld



Despite the significant attempts of FinTech companies to plug some of the gaps in funding for communities across the world, it appears that the current pandemic is having a negative impact on investors and their likelihood of backing funding rounds.  

A new report from Forrester concludes that funding for FinTech’s was already beginning to contract prior to the rise of Covid-19, but has been exacerbated by the current situation. In the fourth quarter of last year global FinTech funding was $7.77 billion, a figure that has dropped to $5.78 billion in Q1 2020.  

This has been supported from a UK perspective by research from techUK in association with blockchain company Qadre. They state that 68% of the FinTech founders interviewed had missed out on funding as a result of Covid-19. The average amount of money not raised ran to £1.2m. 

In more positive news, a report from UBS and reported in crowdfundinsider, suggests that FinTech revenues will climb from a reported $150 billion in 2018 to around $500 billion by 2030. While most growth is seen in the areas of digital payments and online lending currently, this will be challenged by DLT technology (blockchain) and AI as the decade progresses.  

Best of the rest in FinTech 

As Covid-19 forces us to reassess funding models, trade group TheCityUK has called for an overhaul of regulations for FinTech. They argue that there is currently significant regulatory hurdles, which growing FinTech’s struggle to overcome.  
If consumers inherently don’t trust banks, how can FinTech’s make most advantage of this? FinTech magazine discusses.  


Atto News 

Atto were delighted to contribute to the new Innovation in Finance campaign being released by Innovate Finance. Along with a host of other FinTech’s and member organisations, the campaign seeks to highlight the “technological revolutions” taking place in the financial technology space.  

Atto were contacted by BBC Storyworks to tell their story, and particularly why Scotland is the perfect place to launch a FinTech company. With contributions from our CEO and Founder James Varga, and Nicola Anderson of FinTech Scotland, the video captures the growth of Atto in the context of being a Scottish firm.  


The accompanying blog gives further context to the video, including our experience of working with the BBC and why we were keen to work on the project. 

💻 Our webinars continue to grow in popularity with views of our recent webinar hosted with TargetB setting new viewing records. If you work in the mortgage sector, or are interested in finding out how the industry is being overturned through the use of bank data, we’d highly recommend watching this webinar.   

As we’ve taken pains to explain over the last quarter, we understand that digitisation is a necessity for all financial institutions. As part of that, we recognise that one of the current pains within the customer onboarding process is the lack of real-time data.  

The data attained from Bureaus offers an entirely retrospective view on an individual’s finances and offers very little insight into their current circumstances, recent loss of income due to Covid-19, or realistic repayment potential. 

To adequately process the increase in applications and to satisfy the need to identify recent changes in income, Underwriters must take a data-driven approach to affordability assessment. 

💻 We’ll be discussing all this and more in our next webinar, taking place on June 2nd. Titled, Creating Sustenance for Underwriters with Real Time Data. Register today and our team will look forward to showing you how Open Banking and bank data can replace outdated practices and create real operational savings for underwriters.  

That’s all for this week. As ever, do let us know any thoughts or comments. We’re available through our social channels and on email –

Stay safe.

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