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Building a Fund from fresh Air. Can open banking provide a lifeline for those in need?



“For these households, getting into debt increasingly reflects a toxic combination of low income and high fixed costs (such as housing, utilities, food and essentials), making it hard to avoid debt even when life is lived very frugallyIPPR REPORT: Black, Asian and minority ethnic groups at greater risk of problem debt since Covid-19 24th Sep 2020


IPPR released research on 24th September showing the impact of COVID 19 on the financially vulnerable and it made stark reading. The research focused on “problem debt”, (debt which represents a high proportion of disposable income, includes arrears on household bills or credit commitments), and points out where those inequalities lie and how they appear.


In summary it boils down to people’s inability to save due to low income. This impacts BAME communities disproportionately. More likely to be renters, more likely to be in less stable jobs, more likely to suffer from problem debt, all because of low and insecure income.


“An income shock, such as redundancy or a sudden reduction in earnings, can be enough to tip the balance from ‘just about managing’ to ‘just not managing’ for a household that is trying hard to get by on not very much money.”


COVID-19 is the almightiest shock for many and the full extent of this and the divergence in society through increasing inequality has not even manifested itself yet. This is just the tip of the iceberg and it is what lies beneath the waterline that is equally worrying but does not seem to register with many. An ageing population, with great inequality. That inequality means a growing population less prepared for retirement. More pressure on the state and therefore a fiscal deficit built on this even before COVID 19 appeared on the scene.


Can open banking help?


One positive element that has appeared through the COVID-19 period is the number of people in the UK embracing Open Banking in apps and services. Doubling since the beginning of lockdown from 1m to 2m individuals, with this trajectory of growth, the utilisation and familiarity of open banking business models looks set to be a new driver.


“Open Banking used to be the best kept secret in financial services. With 2 million active monthly users and growing strongly that is clearly no longer the case. We can now see that people want to exercise their rights over their data and will do so, as long as you make it simple and secure. Open banking enabled products are rebalancing the market in favour of consumers and small businesses. Users are now able to engage more with their finances and getting access to better products.”

Imran Gulamhuseinwala OBE, The Open Banking Implementation Entity (OBIE).


Utilisation of open banking technologies allows individuals to benefit from their data. Understanding the safety and security of open banking is important to speed up adoption. Genuine value adding user cases are also particularly important to carry consumers along. Helping people understand that they have rights over their data and that by joining together that data becomes more relevant than the data of one individual, although Alexa and Siri might disagree!


Building a Fund from fresh Air is a good user case, democratising fund management and democratising data at the same time through a different take on cash back.

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