Can Open Banking drive a quiet revolution in accountancy?

  Since its launch in 2018, progress on the flagship Open Banking initiative has been incremental and occasionally inconsistent. Will the removal of a significant obstacle to adoption and an increasingly diverse range of products in the space help Open Banking deliver on its promise to accountants? When the door to the Open Banking vault swung wide, back in 2018, the mood was one of cautious optimism. It’s true that the Competition and Markets Authority’s decision to order the UK’s nine biggest banks (the CMA9) to open up third-party access to their data didn’t make headline news. However, some felt it could be a slow grower that could potentially lead to a breakdown in the boundaries between banking and bookkeeping, accounting, reporting, compliance and finance – with accountants among the biggest beneficiaries. Four years on, the pot continues to simmer rather than boil – particularly when it comes to the accountancy profession. Research conducted by AccountingWEB and iwoca in April and May this year found that 34% of accountancy firms still aren’t using Open Banking, and the report suggests that if accountants don’t use it, their clients won’t either. The largest blockers for adoption, according to the report, are trust and interest from clients (48%) and a lack of understanding/confidence from accountants (38%), while the AccountingWEB community also raised concerns about connectivity and reliability issues with the feeds. The fact that banks had been mandated to not only share their customers’ data (and potential market share) but also fund the initiative meant that a certain amount of foot-dragging was inevitable, particularly around the development of access to the data via application programming interfaces (or APIs, as many MTD watchers will know them as) for third-party companies. But for Boskovich, the five-and-a-half-year journey to get the technology to a level of consistent performance is nearing completion. “The OBIE [the UK’s Open Banking standard-setter] ensured the banks have high-quality, high-performing, standardised APIs. That’s massive in comparison with what’s gone on in the EU market, where there’s no single body that acts as arbiter for the standard or for the performance and conformance of these APIs,” she said. “EU banks have their own APIs built to specification but not to a single standard, so it’s difficult for fintechs to connect to thousands of different APIs across the union.” While progress has appeared at times glacial, there are now more than 5m regular Open Banking users in the UK. The Open Banking app store currently lists 249 third parties all using the new ecosystem in slightly different ways, and one significant obstacle to adoption is about to be removed.