Barclays’ Catherine McGrath
A strong consumer focus has seen Barclays spearheading a raft of innovations over the years, from its Digital Eagles initiative, aimed at improving customers’ digital skills so they can better access banking services, to its bPay wearable payments device. It was also one of the first of the major banks to offer physical card printing in branch.
But the advent of Open Banking supercharges its ambition to empower customers and put them in control. In her role as Barclays’ MD for transactional
products and payments, Catherine McGrath is at the epicentre of that.
“Open Banking is about putting customers in charge of their data and letting them do great things with a broad range of parties,” she says. “However, I think it will take time for consumers to get comfortable with this new concept in banking. You need to give them a great reason to share data, one that gives them greater value, and so gain their trust.”
That trust was potentially undermined for all businesses by the recent Facebook/Cambridge Analytica data-handling debacle, which was a wake-up call to regulators and consumers alike. With the heightened interest, McGrath believes the area of data sharing is about to become a lot more complex.
“That’s especially so with providers that look like financial services but aren’t.
They need to make money in another way – by selling people’s data to somebody else, and it’ll be interesting to see the degrees
of transparency that are presented to customers. How do they feel about someone selling their data to a third party, that might sell it on to another third party? There’s a really big discussion to be had around designing to the customer’s agenda:
Indeed there is, but in Barclays’case the conversation has been running for some time. Its customer-driven Open Banking use cases include aggregation, which
allows multi-banked customers to see and do everything in one place, with prompts to help make smarter financial decisions.
“If I’m multi-banked, being able to see everything in one place is great:says McGrath. “Then what I’d expect, as a customer, is some great nudges about how I can get better value from my banking,
or just how I make smarter decisions
– somebody being that useful voice on the shoulder. I’d love to see this expanding dramatically. More of us have multiple pension pots than we do multiple bank accounts. Imagine if you could have allof those in one place and understand a) what you’re going to get when you’re older, and b) how much it’s costing you today:’
It’s exactly the scenario envisaged under the UK’s Open Banking regime, but maybe the framework to encourage it doesn’t go far enough, says McGrath.
“Under Open Banking in the UK, the nine major banks are set up to send out data in
Ai I wonder whether the controls we are getting around financial services data will start to move into other areas of our lives
exactly the same way, which is great for others to ingest because they only need to plug in once. Whether everybody else comes to the party in the same way and chooses to put out the same standard
of APIs, is yet to be seen. But it would be wonderful from a consumer perspective, because then everything is completely interchangeable and, no matter which financial services or third party I go to, I can get the same benefits. So, for us, I see Open Banking as quite a significant opportunity, providing we continue designing things around the customer agenda:
That means being transparent and fair.
“Under Open Banking, customers’ permission for companies to use their data lasts for 90 days and then it needs to be reconfirmed. In the Barclays app, they can see what data is stored about them, who they’ve given permission to use it, for how long, and whose permissions they have switched off.
“We think that this transparency and
control is a really key part of building trust.”
Just how far does McGrath think data sharing under the revised Payment Services Directive (PSD2) and Open Banking agendas could go? Could third-party companies, such as Uber, pull cardless payments directly from customers’ accounts, for example?
“That would need some regulatory attention but they could, in theory,
make the process even more frictionless: says McGrath.”Firstly, though, retailers will need to ask themselves if they want to become payment initiators:
The Open Banking principle of permissioned use of data could, says McGrath, serve as a broader model.
“1 wonder whether the controls around financial services data will start to move into other areas of our lives? Someone could develop a system that said ‘Catherine, you can have all the permissions you’ve ever given to various apps, in one place; turn it on and off and control it:”
Whether she said ‘yes’ would rather depend… “Barclays started by asking its customers what they thought about and what they wanted from Open Banking. Two things became really clear, really quickly. One was that they wanted to feel safe and secure. Secondly, if they did, then they would be happy to engage with it,” says McGrath.
“We have a great reputation already, we treat customers fairly and they are therefore happy to let us do smart things with their data. If we continue to ask
ourselves’is the use of data understood by the customer and on their agenda?’then
I think we’ll continue to do really well: