TISA, the cross-industry financial services membership body, is calling on the industry to help advance its Open Savings, Investments & Pensions (OSIP) initiative via Open Finance technologies as the pandemic has accelerated the need for customers to have better access to a holistic range of digital financial services.
Covid-19 has widened the gap between the haves and have nots. The Bank of England household spending report[1] found that ‘enforced savings’ amongst high-income households amounted to a greater accumulation of savings than usual. 42% of high-income households saved more during the pandemic, compared to just 22% of low-income households. In addition, the Resolution Foundation’s Living Standards Outlook 2021 suggests that a 1.2 million will fall into poverty this year as a result of unemployment, the biggest year on year poverty rate increase since the 1980s.
Open Finance allows people to share their data with third parties who can help them understand their situations much more quickly and conveniently. Such products have the potential to help people take control of their money and get the help and advice they need, leading to better overall outcomes for consumers.
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OSIP is an initiative led by TISA to create a set of API standards for savings, investment and pensions products. It builds on Open Banking which enables consumers to share their current account data with third parties to access new products and services. FinTechs and other financial institutions are given access to savings, investment and pensions data via APIs, bringing this kind of data sharing in line with Open Banking security, data minimisation standards and user experience.
A consumer can choose to share information about their financial products with a Personal Financial Management app giving them a single overview of their financial position. A consolidated view allows a provider to offer new insights; visualise projections of someone’s financial situation; nudge new positive money management behaviours; and refer people to advice when it looks like they need it.
OSIP has the power to increase savings habits for the short and the long term, help people get an improved return on their savings and investments, aid people to invest more sustainably, reduce their carbon footprint, and help more people access financial help and advice earlier. TISA is working with industry members to develop and roll out OSIP for these consumer benefits.
The membership body is now calling on the industry to help build the necessary infrastructure to make this a reality.
Harry Weber-Brown, Digital Innovation Director at TISA said: “Open Banking apps have already helped people set aside money to a savings account. Round-up savings or micro-saving small amounts is helping people on low incomes start saving for the first time and see that investing is possible. OSIP enables industry to go beyond Open Banking by providing standard and accessible APIs to accounts not currently required by regulation. As a result, individuals can compare accounts more easily, automatically switch to a better rate, automate their savings or make more informed trade-offs about whether to save, invest, spend, borrow or consolidate.
“OSIP facilitates a wide range of advice services too. For instance, apps can nudge people towards getting financial advice earlier, perhaps for the first time. OSIP gives an adviser easier ways to fact-find and keep track of their clients’ situation. With more visibility of people’s all-round financial situation and future goals, advisers can set rules with their client to automate investments or drawdowns, ensuring their client’s money is always working as hard as it can for them. We are calling upon the industry to participate to build a truly holistic infrastructure for the UK.”
