Future of Finance


Open Data is a general purpose technology that is going to make or break your business

Open Data is a general purpose technology that is going to make or break your business

A general purpose technology is one which can re-define entire economies and societies. It is now clear that Open Data, or digitised information fed into artificial intelligence (AI) machines capable of formidable feats of computational statistics, are such a technology. If the leadership of your business has not grasped this, the business in which you work will eventually fail, just as horse-drawn carriage and steam engine owners and manufacturers succumbed to the railroads, electricity and the internal combustion engine.

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Open Data presents a compelling vision of an economic transformation, in which empowered consumers and SMEs drive innovation-led growth. It is starting to happen now.

In the United Kingdom and Australia, consumers can oblige their banks to share their data with new providers. SMEs have also found data can accelerate access to credit and cut the price of it too.

Financial services are only the first sector to feel the impact of Open Data. Telecommunications and energy utilities are next in line, but ultimately every industry will be affected.

The effects of the Open Data revolution are currently constrained by engineering obstacles and limited product and service functionality but the impact, when it happens, will scale very quickly.

Consumer resistance to data sharing is real but soluble through rights of ownership and control, management of data by secure and regulated intermediaries, and the convenience of new products.

Value will matter as much as convenience. Consumers will be willing to share their data provided the value of the exchange, in cash or enhanced services, is worthwhile and usage is easy.

Collaborative projects are advancing Open Data exchange in several industries, including financial services, though FinTechs argue that incumbent banks obstruct the sharing of customer data.

Lack of knowledge of the benefits of Open Data is still commonplace among consumers and businesses, and a concerted educational programme is needed to overcome this.

Although government actions (such as GDPR) can slow down the Open Data revolution, only a statutory framework can prevent the risk that the revolution is defeated altogether by Big Tech.