Discussing Open Finance and data on the “Mise en Abyme” podcast
Recently, Anne-Sophie Morvan (Chief Commercial Officer, at LUXHUB) participated in Jocelyne Mwilu’s “Mise en Abyme” Podcast, which sheds light on women and their professional journeys and successes. The experts notably focused on Open Finance and the use of data in the financial services industry.
From Open Banking to Open Finance
The Podcast host and her guest notably discussed the significant impact of various regulations on the daily lives of customers, particularly in the context of Open Banking and Open Finance initiatives. Anne-Sophie Morvan highlighted how these regulatory changes are transforming the way both multinational companies and retail customers interact with financial services.
One potential notable effect of Open Banking is the simplification of financial management for multinational companies. The Chief Commercial Officer of LUXHUB explained how companies with operations across Europe can now consolidate their various payment accounts from different countries in a single view within their Enterprise Resource Planning (ERP) systems. She stated, “to have a single view on all your different payment accounts held in different European banks…is quite helpful.” This consolidation addresses a common challenge faced by businesses, enabling them to streamline their financial processes and reduce administrative burdens associated with managing multiple accounts.
She also emphasized the enhanced user experience facilitated by Open Banking for retail customers, with a concrete example. Customers seeking loans or mortgages traditionally have to provide extensive paper documentation, including transaction histories. However, with Open Banking, this reliance on paper documentation can be significantly reduced, if not eliminated. By granting their banking advisor access to their payment account history, customers can expedite the process, allowing for faster analysis and reduced risk of errors. She explained, “this is one of the possibilities that is offered by Open Banking and which, of course, offers a far better user experience.”
Anne-Sophie Morvan also focused on the upcoming switch from Open Banking to Open Finance, a broader initiative advocated by the European Commission. She underscored the customer-centric approach of these regulations, emphasizing the empowerment of customers to control their data and seamlessly transfer it between service providers. She added, “you should be entitled to request provider A to transmit data to provider B in an immediate and secure manner.” This transition towards Open Finance reflects a commitment to enhancing user experience and promoting greater data control for customers.
Giving customers more control over their data
The Chief Commercial Officer explained the transformative impact of Open Banking and Open Finance initiatives facilitated by the European Union. She discussed the challenges faced by both established and new players in accessing data, which is crucial for the development of innovative services. The European Commission aims for a standardized, secure, and automated approach to data access. This approach would simplify processes and enhance user experience, ultimately driving innovation and improving accessibility to financial services for individuals.
The proactive stance of the European Commission in promoting data transparency actually goes beyond financial services to encompass various industries. She drew parallels between these efforts and the General Data Protection Regulation (GDPR), emphasizing the fundamental principle that data subjects are the rightful owners of their data. Mrs. Morvan highlighted the GDPR’s right to data portability but acknowledges its limitations across industries.
Consequently, the Commission is implementing clear obligations in multiple sectors, including Open Banking and Open Finance. Additionally, she mentioned the Data Act, which mandates IoT device producers to provide standardized data access. Overall, these initiatives aim to empower both individuals and legal entities with greater control over their data, aligning with the broader goal of enhancing data transparency and accessibility across diverse sectors.