The Yolt mobile money management app has launched in the U.K. today in an open beta testing format that invites consumers to download the ING Bank supported app for free on Google's Android or Apple's iOS operating system.
Users can view their bank accounts, credit cards, bills and so forth from various different providers in one place.
Yolt enables price comparison, budget setting, account checking and other such functionality to be carried out from a user's mobile phone as it seeks to collate consumer finance data in an easily accessible format.
Chief Executive Frank Jan Risseeuw said in a statement: "We're a mobile app, designed to change the way people think about their finances, and harness the power of open banking to make it easier for people to focus on other things in life."
Yolt launched with an energy price comparison tool today. The company says it is working with other financial technology (fintech) startups to integrate more comparison features in the future as its rollout continues.
It was previously in a closed beta test phrase with 2,500 restricted users and limited functionality since November of last year. The Dutch headquartered ING Bank, which owns the app, wanted to develop the app prior to this wider launch in the U.K. Other markets in Poland, the Netherlands and elsewhere where ING operates may follow.
"We will soon launch a comparison service for international money transfer comparison in the U.K.," said Frank Jan Risseeuw, COE of Yolt, in a conversation with CNBC.com. This will join the energy price comparison tool unveiled today and could be joined by insurance, bank account provider data and numerous other such tools in the future.
Risseeuw said the company plans to "keep expanding the partner ecosystem" in future "based on the user feedback we get and the interesting partners we meet on our development journey".
According to Risseeuw, Yolt is based on three principles. It allows users to:
- Create an overview of every account a consumer has
- Explore insights based on consumers' spending data and predicted future expenditures
- Make it possible to act on the data to get a better bank account provider, insurer, credit card, energy provider and so forth.
Open banking and data environment
Yolt is important because it presages a more 'open banking' environment and will take advantage of the European Union's (EU) imminent new Payment Services Directive (PSD) 2 regulation. This seeks to encourage more competition among the continent's banking and payment providers by freeing up data and market access, giving opportunities to fintech newcomers outside of traditional transaction banks to disrupt the marketplace.
The U.K. Competition and Markets Authority (CMA) is also attempting to make bank account and transaction data more open. The aim of the U.K. CMA Open Banking initiative is to make the industry more competitive and like a utility. Combined with the EU PSD2 regulation, it could lead to an avalanche of new fintech-enabled financial services providers in 2018 when both rules are due to go fully live.
The CMA Open Banking initiative mandates that U.K. banks must make standardized product and reference data available to authorized third parties by 2018 in order to increase competition and service. With customer consent, U.K. banks will also have to provide secure access to specific current accounts by 2018, enabling others to read the transaction data and initiate payments.
This will mean that banks cannot hold on to customer data exclusively, as they have in the past. The information will be shared through an open Application Programming Interface (API) framework, which the U.K. regulator says will prioritize customer protection and maintain cybersecurity.
An Open Banking Implementation Entity will develop API standards to allow two different pieces of software from different financial institutions (FIs) to interact and exchange data in a secure environment.
Application Programming Interfaces (APIs)
The API-led revolution in the U.K. will mean that Yolt, or any other such apps, can in the future develop tools to mine data more easily, offer price comparison tools and develop competitive banking or personal finance products.
The idea is that customers will own their data in the future, not the banks, and can give permission for it to be shared. When data is free and accessible, and tools can be built around it via open APIs, customers should be able to be informed by technology-led newcomers about where to find the best prices, services and so on.
The interaction between regulation and technology is crucial here. Regulators are trying to free up the marketplace to admit the power of new data sharing and analytical technologies in a secure manner.
However, it is not just fintechs that can take advantage of the new rules. As the ING-backed launch of Yolt proves banks may use it too to break into new markets themselves. The CMA mandated API revolution is not due to hit until 2018.
The final EU-wide national implementation of the PSD2 regulation is also not due until 2018 and there are still some outstanding issues to resolve, principally the draft PSD2 regulatory technical standards (RTS) rule proposed by the European Banking Authority (EBA). If it goes through this amendment would ban screen scraping of customer data from online banking interfaces and mean the banks could retain more control of how and when data is shared. A coalition of 62 fintech firms organized by the European Fintech Alliance (EFA) is presently fighting the RTS amendment to ban screen scraping.
The future regulatory controls and landscape for open data and banking in Europe is therefore yet to be finalized, but the direction of travel is clear.
As Risseeuw said in conversation with CNBC.com: "Yolt has been developed to fully harness Open Banking and PSD2 in order to build a platform where people can manage their money in one place. APIs are the preferred technology for open banking (as demanded by PSD2). We've invested in our solution to be ready to deal with this, and for when the APIs of the banks will become available."