Nesta Challenges is today launching Open Up Challenge 2020 – a £1.5 m prize fund, run in partnership with Open Banking Limited, to encourage fintech innovators to create open banking enabled solutions which help consumers across the UK make more of their money.
Research conducted to mark the launch of Open Up 2020 has found that millions of people across the country are currently struggling to stay on top of their finances. One in three (29%) say that they regularly run out of money each month – equating to around 15.2 million people.
The survey also found that half (52%) want to feel more in control of their finances and nearly four in ten (37%) know they could get a better deal for their financial products but don’t know where to start.
Open banking allows people to get personalised, tailored information to help them manage their money by giving consent for regulated companies to securely analyse their bank data. Products and services powered by open banking are beginning to show how people can revolutionise their finances through better budgeting, managing debt, automating savings, and making it easier to compare products. Half (48%) of people say they would like new tools and apps to help them manage their money and Open Up 2020 is designed to incentivise innovators to accelerate the development of these tools even further.
The study also suggests that these products and services could be particularly helpful for the most vulnerable in society or those who are not financially resilient. Nearly nine in ten (86%) people who have already used a product enabled by open banking think it would help people who are financially vulnerable to manage their money, and almost eight in ten (77%) believe that those struggling financially or on lower incomes need to be better supported to make more of their money.
There is clearly an appetite among lower income households for this type of support, with over a third (35%) of those earning £20,000 or less saying they would use an app that helped them manage their money. The areas that lower earners are most likely to want help with are: saving money on bills (25%), saving more money automatically (21%) and helping identify savings on lifestyle costs (17%).
Open Up 2020 will accelerate innovation in this space by offering financial prizes and expert support to the most impactful solutions which use open banking data to help people – particularly those struggling financially – to make more of their money. It follows the successful Open Up Challenge 2018 which focused on improving the financial products and services available for small and medium-sized businesses.
Chris Gorst, head of Better Markets, Nesta Challenges, said: “For many people, managing their finances can be confusing, time consuming and stressful. But new digital tools are being developed to take the pain out of this process and it’s vital that as many people as possible can benefit from these solutions.
“Open banking is the biggest change in this sector since online banking and, with millions of people across the country struggling to keep on top of their finances, now is the time to ensure genuinely helpful products and services are able to come to market. Open Up Challenge 2020 will offer financial prizes and expert support to the most impactful solutions which help people – including the most vulnerable – take control of their money and make the most of it.”
Imran Gulamhuseinwala OBE, trustee of the Open Banking Implementation Entity (OBIE), commented: “People can access their banking data and make payments easily and securely through Open Banking so that their hard-earned money works even harder for them. With banks approaching their implementation deadline for Open Banking in September, Nesta Challenge’s Open Up Challenge 2020 encourages and incentivises innovators to create even more products through Open Banking that will make a real impact on people’s financial wellbeing and wallets.”
Open Up Challenge 2020 opens for applications today and closes on 2 October 2019. To find out more visit: openup.challenges.org