The pandemic is opening up finance in a way that we could not have imagined a few weeks ago. On the day of the closure of the FCA’s Open Finance call for input, Sam Seaton, CEO of MoneyHub told Professional Adviser
Open finance has the power to transform consumers financial wellbeing and is essential for informed decisions to be made by them… having readily available information is a “basic human right”.
Without the information, it is impossible for consumers to make informed short, medium and long term decisions for themselves, let alone their families.
Not long till the data’s blown
The pandemic has led to home-working and a surge in demand for data.
Organisations holding out for wet signatures are now facing not just the Law Commission’s edicts but the practical impossibility of dealing with paper. Pension Bee’s skeleton staff come in to its office for “essential work” – scanning the post required to keep transfers moving. On the other side of London Wall, WeWork’s only staffed function is its post room, now overflowing with items signed for – never to be read.
This morning – a courier will arrive at Tapper Towers so that a deed can be witnessed and returned. The deed will be delivered – hopefully at a 6 foot distance- and returned. I anticipate a farcical flinging of clipboards accross a back-street in Blackfriars.
Meanwhile, we are learning that Zoom, Hang-outs and Teams all have “record buttons” that allow us to capture moments like the signing of deeds, and mail them to each other as MPEGs.
Band-width will drive us apart (again)
My partner and I are driven apart during the day by the lack of band width from our wi-fi. Though we are only yards from BT’s Openwork HQ, we do not have BT’s “fast” brand – but some crappy version coming to us down copper wires.
For us to work together, one of us has to be offline – most of the day both of us are on web-serviced calls. So I make my way over to WeWork (no work) and am likely to be today one of less than 10 people in a building that last month saw 3000 people a day pass through its doors.
Both and I and my partner can only do our jobs if we operate on separate wi-fis, bandwidth will drive us apart again.
Closed to data = closed to business
Last week, one large insurer , deferred a decision-making meeting from March 26th to August 6th. Presumably it was thought impossible for an organisation to progress its strategy if the decisions were not taken face to face.
The deal will most likely be done elsewhere, online and with agility. Ways will be found – within the law – to enable ordinary people to get access to the information needed.
As Sam Seaton says “having readily available information is a basic human right”.
So long as we regard information as accessible only with the help of postal services, we will be denying people that basic human right. Keeping important information on microfiche or in physical filing cabinets is simply not acceptable. If information is personal and is needed, the GDPR says it must be accessible in a machine readable format.
Businesses that refuse to share our data will close, and the current pandemic will mean most will not recover.
The risks of not going digital
Much is made of data security and the risks of scamming, data corruption, data theft and from many other forms of cyber-crime. The fear about these risks is that we do not fully understand them. Necessarily we amplify them out of that fear . I am not saying there are not risks from the free transfer of data. We need secure networks, we need powerful verification and encryption and of course we need humans to behave in a responsible moral way.
But the risks of not going digital are greater. Sam Seaton’s comments are spot on. If we cannot get the information on which to take decisions, we will take bad decisions or no decisions – which could be worse than bad.
The DWP estimate that unless we take steps to stop current trends, 50m pension pots will be abandoned by 2050. The PPI tell us (via the ABI) that £20bn of money in pensions is unclaimed. People who lose their pensions – lose the right to the kind of retirement they have earned through saving during their working lifetime.
Can anyone say that “closed finance” is working for them?
Here is that video!
This video has been shared 565,000 times (As at April 1st – no fooling)
— Henry Tapper (@henryhtapper) March 31, 2020
I’d be very pleased if it was viewed a few more hundred times on this link. It shows how a family in lockdown, can reach over half a million people by pressing “record” and sharing a data file on the internet.
You cannot suppress good things like the Marsh Family’s communal singing. You cannot suppress the free-flow of data to allow us to know about our financial situation.
I suspect that the next few weeks will force the issue and we will return physically to our workplaces later this year, with a radically different view on how data should be shared.
The FCA closed the open finance consultation on 17th March, about the day that Coronavirus opened the new one.