Some U.K. FinTechs have accused various credit card issuers of not giving customers full access to their own data and costing consumers “millions.”
In a letter to City minister Andrew Griffith, Gavin Shuker, CEO of credit card management startup Cardeo, said that the 14.5 million interest-paying cardholders in the U.K. have been losing money amid the external pressures of the cost of living crisis, the Financial Times reported Saturday (Oct. 8).
And James Vargas, CEO of credit scoring FinTech DirectID, noted open banking’s original goal was to “share everything on the bank statement,” which only some banks actually do.
The letter demonstrated the FinTechs’ irritation as they argued that customers should be able to share their full financial data — which could help the FinTechs offer more money-saving services, such as personalized spending insights, ways to manage credit card debt and cheaper payment methods.
According to campaign group Axe the Card Tax, scheme fees going to the card networks, along with processing fees, could cost U.K. businesses a total of £1.9 billion per year. Regulations from 2018 make it so credit card issuers have to let customers access and share online account data with third parties, though it doesn’t apply to things like interest rates and loyalty scheme points from monthly statements.
U.K. consumers have in general been becoming more open to digital banking, with more services expanding to meet the burgeoning demand.
Read more: Digital Lenders Flood UK Mortgage Market as Battle Against Incumbents Grows
PYMNTS wrote recently that depending on the products and services offered, traditional banks have been able to hang onto a foothold in the changing world. Customers’ expectations also vary between neobanks and traditional institutions.
In a recent PYMNTS study looking at those expectations, 41.2% of respondents said they expected to be able to get financing from a traditional bank, while just 28.6% expected the same from a FinTech.
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New PYMNTS Study: How Consumers Use Digital Banks
A PYMNTS survey of 2,124 US consumers shows that while two-thirds of consumers have used FinTechs for some aspect of banking services, just 9.3% call them their primary bank.
https://www.pymnts.com/digital-first-banking/2022/fintechs-foster-digital-transformation-in-smaller-overlooked-african-markets/partial/
