UK FinTechs Ask For Full Financial Data Sharing To Support Cardholders
Different credit card providers have been charged of “costing consumers millions” by certain U.K. FinTech companies for allegedly denying clients full access to their personal data.
The 14.5 million cardholders in the U.K. who pay interest have been losing money as a result of the external pressures of the cost of living crisis, according to Gavin Shuker, CEO of credit card management startup Cardeo, in a letter to City minister Andrew Griffith, the Financial Times reported on Saturday, October 8.
And James Vargas, CEO of credit scoring FinTech DirectID, noted open banking’s original goal was to “share everything on the bank statement,” which only some banks actually do.
The letter showed the fintechs’ annoyance as they argued that customers should be able to share all of their financial information. This would enable the fintechs to provide more cost-effective services like customised spending analyses, strategies for managing credit card debt, and more affordable payment options.
Campaign group Axe the Card Tax estimates that processing fees and scheme fees paid to card networks may cost U.K. firms a combined £1.9 billion annually. Credit card issuers are now required by regulations from 2018 to allow users access to and sharing of online account data with third parties; however, this rule does not extend to information like interest rates and rewards programme points from monthly statements.
Consumers in the U.K. are generally becoming more receptive to digital banking, and more services are growing to accommodate the rising demand.
According to PYMNTS, conventional banks have been able to maintain a presence in the ever-evolving financial landscape based on the goods and services they provide. Customers’ expectations differ between conventional institutions and neobanks as well.
A PYMNTS survey that looked at those assumptions found that just 28.6% of respondents anticipated the same thing from a FinTech and that 41.2% of respondents expected to be able to secure funding from a conventional bank.
