Column inches and water cooler talk of Visa’s agreement to buy US-based AISP/PISP Plaid for $5.3bn have focused on the company’s valuation in the sale (double its final private valuation) and what the deal means for its buyer’s plans. But discussion of the wider context – of what this acquisition means for the future of Open Finance – has been scarcer.
As a company with Open Banking baked into our DNA, we have never doubted that transparency and ease would be revolutionary for the financial services sector, enabling creativity and flexibility in the market and restoring consumer trust and control. Moneyhub has invested hugely in building technologies that support and further these ideals. The value of the Plaid acquisition tells us what we already knew: Open Banking’s position as the future of financial services is now beyond question. And Open Finance – the extension of Open Banking into pensions, insurance, loyalty programmes, investments and employee benefits – is its natural heir.
Visa is right to want to position itself in the Open Banking model, and right to want to harness the value and power of financial data. Given the potential upside, it is also right to place a high premium on its entry into the market. And its timing is also telling. Open Banking can no longer be seen as a vague and pleasant notion designed to friendify the financial industry, nor a perceived direction of travel for the sector. Open Banking, and by extension Open Finance, are real, here and happening now.
Up to this point, the shift has been tectonic – slow, definite, permanent – but Open Finance is now a mainstream concept within the financial services sector, and has started to broaden its reach into businesses who want to engage with their employees (Moneyhub is working with a number of employee benefits consultancies to help with this endeavour). The possibilities for the future, as Visa must know, are endless.
It is a truism of the digital age that data is the new oil. Our commitment to Open Finance lies in the belief that a deep-level understanding of consumer data will lead to greater innovation in the financial services sector. In fact, it already has. Moneyhub’s technology has demonstrated the power to shape a generation of businesses which put the consumer’s best interests in their top-line strategy, and reap the rewards of investing in a new era of financial wellness. Those businesses that have successfully integrated with our tech stack, giving themselves access to unrivalled data assets, are at the forefront of this new default mode of operation for financial services. The high value of Visa’s acquisition point for Plaid should come as no surprise given the transformative potential for Account Information Service Providers (AISPs) and Payment Initiation Services Providers (PISPs). Moneyhub, like Plaid, is both.
Moneyhub is a pioneer in Open Finance. We were the first to offer machine learning for our data categorisation engine and first to offer innovative highly personalised ‘smart nudges’ to let customers know how and when better products and services may be appropriate, empowering smarter financial decision-making and planning. And our exclusive data partnerships and affiliate partners give Moneyhub more financial insight to pass on to our partners’ customers.
Visa’s headline-grabbing investment in Open Finance should act as a beacon to the financial services sector – indeed to the wider world – that data is critical to the future health of its businesses and to the future financial wellbeing of its customers. Flexibility, ease of use and security are shared touchpoints of both our partners and their customers. The idea that these tenets could be ignored in favour of a continued reliance on old-world more traditional methods has been blown into the weeds as a stalwart of payment processing firmly pins its colours to the mast of a future in which fintech companies transform the financial landscape for the better.
Source https://www.ft.com/content/75c80e60-364f-11ea-a6d3-9a26f8c3cba4