In this episode, we spoke with James Varga, who co-founded The ID Co in 2011 with a mission to create convenience allowing consumers to sign up to new products and services in seconds.

He is active in a number of local and global efforts to help people do more online, including the Fintech Delivery Panel, the Open Banking Excellence where he is Co-founder and Trust In Digital Life.

As one of the first to call for Open Banking in the UK, James has a wealth of experience in this space. Having previously built a personal finance management and aggregation service, he has a unique perspective that highlights the importance of customer convenience in the overall success and adoption of Open Banking.

Among other things we discussed:

  • What is Open Banking?
  • Applications for Open Banking
  • The identity challenges
  • Matching the right person to the right product
  • GDPR and Open Banking
  • Data ownership is key
  • 2018 – the year of regulated disruption
  • Giving the consumer back control
  • Why has Open Banking been slow to take off?
  • Is Open Banking good for banks?
  • The real opportunity for Open Banking
  • What’s the Open Banking silver bullet?
  • Account aggregation is just the start
  • Using data for customer onboarding
  • Consumer behavioural change
  • The balance between convenience and reward
  • Banks are bad at using data
  • Being a B2C Fintech isn’t easy
  • Monzo’s IFTTT integration
  • Consumer data ownership is key
  • We need to give consumers an incentive to use Open Banking
  • Instant loans – 45% revenue increase & 7% fraud reduction
  • The Australian Open Banking scene
  • The open data approach is a risk
  • Getting the regulators involved
  • 3 things for next week

Episode Chapters

01:30 What is Open Banking?
02:58 Applications for Open Banking
03:28 The identity challenges
03:57 Matching the right person to the right product
05:00 GDPR and Open Banking
05:23 Data ownership is key
05:34 2018 – the year of regulated disruption
06:08 Giving the consumer back control
06:39 Why has Open Banking been slow to take off?
07:35 Is Open Banking good for banks?
08:34 Bank data is a leaking bucket
09:08 The real opportunity
09:33 What’s the Open Banking silver bullet?
10:42 Account aggregation is just the start
11:12 Using data for customer onboarding
11:49 Consumer behavioural change
14:01 The balance between convenience and reward
15:16 We don’t want the car loan – we want the car
15:56 The bigs banks try to innovate
16:08 Go build something in a WeWork
16:31 Banks are bad at using data
16:57 Being a B2C Fintech isn’t easy
17:36 Monzo’s IFTTT integration
17:53 Consumer data ownership is key
19:24 We need to give consumers an incentive to use Open Banking
19:42 Instant loans – 45% revenue increase & fraud reduction
21:39 Better managing a risk portfolio
22:20 The Australian Open Banking scene
23:34 The open data approach is a risk
24:48 Getting the regulators involved
26:30 3 things for next week
26:40 Think about the data
27:56 Find out more about James

More about James

Twitter: @JamesVarga
Company: The ID Co
LinkedIn: James Varga

Show Transcript

Intro: 00:03 Welcome to the Actionable Futurist Podcast, a bi-weekly show all about the near term future with practical advice from a range of global experts to help you stay ahead of the curve. Every episode answers the question, what’s the future of … ? with voices and opinions that need to be heard. Your host is international keynote speaker and Actionable Futurist, Andrew Grill.

Andrew Grill: 00:29 Welcome to episode nine of the Actionable Futurist Podcast. My guest today is James Varga, who founded the id Co in 2011 with a mission to create convenience, allowing consumers to sign up to new products and services in seconds. He is active in a number of local and global efforts to help people do more online, including the Fintech delivery panel, the open banking excellence, where he is co-founder and trust in digital life. As one of the first to call for open banking in the UK, James has a wealth of experience in this space, having previously built a personal finance, management and aggregation service, he has a unique perspective that highlights the importance of customer convenience in the overall success and adoption of open banking. Welcome James.

James Varga: 01:10 Thank you very much.

Andrew Grill: 01:11 You know, I speak a lot about open banking and opportunities it opens up for consumers in all of my keynotes, but more than a year since launch,. when I ask for show of hands as to who’s heard of it, the number is so woefully low. Can you tell us exactly what is open banking and why consumers and businesses should actually care?

James Varga: 01:28 I guess it depends on your perspective. Open banking in the UK is based on PSD2 which has two big components. The first one is all around providing access to your bank account data or more accurately I think sharing your bank data as consumers, being able to leverage that and share that with other people. And the second component, which is more PSD2, is being able to pay from your bank account, but it’s account information, which is where we started the conversation from is how to leverage that identity and data that you’ve built up in your bank account to be able to do things online. How can we use the sharing of that data with the consumer’s consent to go and do more things online? So for me, open banking just now in the industry is really around financial data. Open banking is sharing that data and there’s a huge amount of value in that.

James Varga: 02:18 When I talk to people, I get them just to think about what their bank statement would tell you about the person as a way of personalising it, as understanding it because I think that’s the real challenge with open banking is – it is fairly new. The use of bank data has been around for a long time. We’ve always given bank statements to get mortgages, this is nothing new in a lot of regards, but using the data in a digital format is, and you have to personalise it, you have to think about what your bank statement would tell somebody about you and where you could use that information to make your life a bit better.

Andrew Grill: 02:50 I’ve always thought if I gave my bank data to someone who was a bit smarter than my bank, no disrespect HSBC and Nationwide, but a Fintech in Shoreditch, or your company could actually tell me how to save better or look at the things I’m spending, or give me an indication, as if I had a personal banker looking at every transaction that I did.

James Varga: 03:07 Potentially, absolutely. You know, if you look at my bank statement, you know, I live in Musselburgh, which is just outside of Edinburgh. You know, I go to Edinburgh every day at during the week, you know, I spend a couple of days down in London. That footprint, that financial behavior about me is, is really, really important. Especially when so many things that we try to do online are predicated by knowing the individual. You know, this is the identity challenges – are you who you say you are. First of all, on the internet, nobody knows you’re a dog is the really old, I’m dating myself now. But also is how do we give you the products or the services appropriate? Are you the right person for this loan or credit card or mortgage or you know, first of all, should we give you a different product or when we do give you that product, and this is an area I think has huge potential in open banking just now today, is are you the right person for that product? Can you afford it? Can you make the payments? When we do go to get the payments from you, are we taking them on the right day? Is there a reason why that you’re asking for this? That isn’t the reason why we want to give you the loan. It’s trying to match those products with the consumer and personalise that experience.

Andrew Grill: 04:15 And the personalisation thing is important. We’ll talk about this in a moment, but I think consumers until now haven’t realized that they can actually use their own data that they own to give it to someone else to say – hey, what do you think of this? Until now, you’d literally have to give them physical or PDF copies of your statements. And it’s very difficult to make sense of that.

James Varga: 04:32 And even with that, the business can’t rely on that data. You know, if you print out your bank statement as a PDF and send that in the post, first of all, that gives me the cringes, you know, sending my things to them.

Andrew Grill: 04:42 Hang on, you’d send a PDF in the post? That’s an oxymoron.

James Varga: 04:45 Exactly, or you go into your bank branch, you get it notarized, so it’s validated by someone and then you send it. I mean, all of that is just ludicrous in this world where, you know, as consumers we’re really motivated by one thing and that’s convenience. We’re all lazy, right? I think GDPR is also really come into open banking at the same time as open banking is developed and has helped clarify issues around who owns the data and the transparency and being able to leverage that as individuals. When we started 10 years ago talking about this subject a long time ago, again, dating myself, you know, that was a foreign concept to a lot of banks. They felt that they still owned the data, but we’ve been able to clarify that it’s your data. You should be able to use it and we should be able to find uses that actually have that benefit.

Andrew Grill: 05:29 I’m smiling here because you must have seen my presentations or if you haven’t we’re psychic, because I talk about 2018 being the year of “regulated disruption”. The two things are GDPR and open banking. GDPR cleans up the data protection act to allow consumers to have some level of control and open banking or open utilities or open telco, we’ll talk about that in a moment. It allows that data to be portable and I think we’re having a watershed moment where consumers are now saying, you mean I can extract some value out my own data. Wow! what a revolution.

James Varga: 05:58 And it’s just the tip of the iceberg, you know I think that’s the other really exciting thing about what we’re seeing now with open banking is it’s a really valuable bit of data that I guess brings into focus the potential of putting this control back into the consumer of letting them do things with the data they own. There’s much further we can take that whole topic, but open banking is in a lot of ways pioneering that mindset for an industry around this sort of data that’s never been used before.

Andrew Grill: 06:26 So when I was back at IBM, I asked a couple of the big banks as they were working on their open banking projects, and I understand there are hundreds of people at each bank working on this. Would you have done it if you hadn’t been mandated? And they said, of course not, it’s expensive, but why do you think the adoption has been slow to take off and what will accelerate open banking and drive real adoption into this year and next?

James Varga: 06:45 It’s interesting. Banks have put a lot of effort. I think the UK has probably spent about a billion pounds on providing access to data. And maybe as a little anecdote, I know one of those top few banks, there’s nine in the CMA nine as they’re called, and one of the bigger ones has a team of about 300 people working on providing data into the market and it’s all they do for two and a half years. They’ve sat in rooms and tried to put together some APIs for about 500 million pounds in cost, you know, so that’s a huge amount of resource and energy and I was asked to come in and do a little talk to them, a showcase and they have an annual group meeting for that part of the business, and someone before me asked the question, and I think this is really reflective of where the industry still is today. They asked, is this good or bad for the bank? And what do you think the result was?

Andrew Grill: 07:39 Well, if I was someone in senior management about to retire or move on, I would go – I don’t care, I’m a prayer, I just pray it’s going to go away. I think if I was someone younger in the bank and saw that we were investing for the future and had a more of a futuristic approach, I think they would say it’s excellent, but I’m sure the shareholders wonder why they’re pumping all this money into a project that actually returns essentially nothing. Day One.

James Varga: 07:59 And even a year ago I was in board meetings of some of those, maybe not the bigger banks, but the smaller ones and absolutely there were people going, this will never happen. A year, maybe just over a year ago, halfway through the regulations.

Andrew Grill: 08:13 Are these the same people that said automatic teller machines will never take off?

James Varga: 08:16 Probably, or “cash is still king”. The really interesting bit was about 70% about three quarters of the people in the audience thought it was a bad thing for the bank.

Andrew Grill: 08:25 Because they couldn’t say the payback, because they were looking short term. That year’s bonus and whether they get, the EBITDA

James Varga: 08:27 I think even more so, and they got to this point was the general view is that it’s still banks giving away all this valuable data, the data they used to own or they used to be able to say they owned, you know, as a leaking bucket. And actually the point that he was making was was actually yeah, that is the way that we’ve seen it traditionally, but we have to plug the holes in the bucket and start filling it in. And that’s really where I think open banking is today. We’ve spent a huge amount of effort in the UK providing access to data PSD2 is now rolling out as of mid September through Europe, 11, 12 countries around the world have all launched open banking programs. But that’s a means to an end. The real opportunity is even for those bigger banks as much as Fintechs and anybody else in the industry is how do you consume this data and what pains do you solve from it?

Andrew Grill: 09:17 So I’m seeing ads at the moment in mainstream press for account aggregation. I’ve seen both Natwest and Barclays that basically had their competitors in there as well. That seems like a really easy thing to do, but I’m not sure how many people have multiple banks. What’s the next use case? What’s the silver bullet for open banking? Or isn’t there one yet?

James Varga: 09:35 Is there a silver bullet is a really interesting question. I don’t think that exists. You know, in any walk of life, there’s never a a golden egg, if you would, with account aggregation, that’s how we’ve always used bank data. Personal finance management or PFM, account aggregation has been around in the UK for 15 years. It’s what drove the agenda in the UK to take PSD2 and account aggregation and make it something more, was the idea that people could use this data to help manage their finances as wealth management, personal dashboard, all the rest of it. I think there’s, there’s a real challenge in that and even looking at some of the US examples like and even the adoption rates in the Lloyds money manager, the Monzos of the world or whatever is where’s the value to the consumer? And I think a lot of those apps still miss that. I don’t know about you, I don’t actively manage my finances and I don’t think most people do.

Andrew Grill: 10:23 But I would pay for an AI device to do it for me and tell me what I should be doing. I mean, that’s the value I think sort of set and forget, tell me what I should be doing differently.

James Varga: 10:32 Absolutely. I agree with that. But the idea that people are going to log into an app, manage their money every day to kind of control how much they’ve spent on Starbucks or versus Costa [coffee]. Account aggregation is used to gather some more information, but it’s the conversational banking is the predictive insights around wealth and investment. There’s more interest there, but that’s predicated on the fact that consumers are really lazy, right? You’ve said it yourself, you don’t want to go and do something, you want it to do it for you, and I think that’s the root of where the successful use cases that we see and open banking and bank data. One of the things that we focus on, as a sector that we focus on today is customer onboarding. Using bank data for customer onboarding and think of it as getting a loan or mortgage or credit card or applying for a new job, even renting an apartment. You have to prove your income.

Andrew Grill: 11:23 So there is an API for that.

James Varga: 11:25 Exactly. Well there is now, but that income verification even as a small simple use case has real benefit to me as a consumer because I can do that with convenience.

Andrew Grill: 11:35 If I say I earn $100,000 the API says $100,000 and it really is $100,000

James Varga: 11:39 And then the business can rely on that and the impact, if we can look for use cases that have both the benefit to the business, I’ll expand on that in a second, but most importantly a behavioral change for consumers and impact to the consumer, that’s based around convenience, not privacy or security, I mean that’s nice as as as a group of people in the industry, that’s the sort of things that we talk about, but it’s not what the average person on the street talks about. It has to be around convenience. So the closest I think we’ll get to a golden egg or something like that is use cases that generate that experience for consumers. I’ve challenged for a long time, why have a personal finance management app? Why not just connect my bank accounts to something, have something, summarise it, and then email me a report every day. Do I even need an app? I don’t want an app, actually, I just want the answers.

Andrew Grill: 12:29 I talk about digital agents more broadly in managing our minutiae of life because they’ll find knows everything, but I can see a time where rather than me having to look at the statement and say I should be putting some money there, I trust my AI to do it for me as if I had a personal banker who just did nothing else but sat there all day and looked at my money management. I think that when they see the benefit and they go, oh, I’ve got another hundred pounds in the account that I didn’t have yesterday because the AI has gone and invested in the short term money market. I just thought of an idea then when the Government here said it’s going to cost you 5 pence for a plastic bag, guess what? People including me brought their bags in because they didn’t want to pay even 5 pence and they’ve removed something like 80 billion bags.

Andrew Grill: 13:08 So I think it is a real change in consumer behavior, but because it’s about money, show me that I can make more money or save more money by something doing it for me and the set and forget. You’re probably like me, probably one of your first friends have a mobile phone. When I got mine probably 20 years ago, cost me $1,000. I was a student. Everyone said, why have you got one of those? Slowly they saw that I was getting more jobs, I was easier to contact and slowly my friends said maybe I should get one. So I think it is like you and I probably the early adopters given where you work and where I worked, we’re trying these new things and even the apple card and those sort of things coming out are challenging the market and the new digital banks. I’m hearing more people say, oh you’ve signed up for Monzo or Starling or N26 what’s it all about? I think people are experimenting but they will only stay if they go, I’ve made some money because people are a bit greedy when it comes to money. Don’t you think?

James Varga: 14:00 In the balance there isn’t it, you know, between the sort of convenience and benefit and reward and and that behavioral change that you have to go through. We support about 35 customers on the platform. We’ve may be worked with 80 to 100 companies over the 10 years. It’s been a long journey and there is some really exciting ones. And one of the areas, I think there’s a good adaptation of account aggregation is the roundup type propositions. Because to your point, that does have that financial reward with the convenience. You set it, you forget about it and it just does it for you.

Andrew Grill: 14:34 And the 16 pence that I would have got in change, that all adds up and then magically you have another 50 quid that month. Wow. That’s pretty cool. I’ll keep doing that.

James Varga: 14:43 Absolutely. And whether that’s to get the financial benefit or is to feel good. One of the customers we’ve worked with sustainably is about rounding up and then giving to charity. There’s another one that’s about rounding up, giving pensions and investments. I like those models because you don’t have to actively engage with them. I really struggled with the other end of the scale where really just table stakes is put all your finances in one place. We want to connect this data so that we can understand our customers better. It has nothing for me as a consumer, we’re motivated to spend money. Most people I know work to spend money and we don’t want the car loan, we want the car as the saying goes, right? I mean that’s where as an industry we need to look for these use cases that we can take a first principles approach, go down to the really behavioral challenge, the need of the situation, not even the consumer but the need of the situation and then build propositions from that.

Andrew Grill: 15:32 So who’s doing that? I’m going to be a bit harsh on the banks saying they’re probably not doing that because they’re too busy building the plumbing. Is it the startups in Shoreditch? Is it the startups in New York? Is it your company? Who is out there testing these new use cases and trying them out and saying now we’ve got the plumbing for open banking in the sandboxes, we can try these out. Or is it going to be left to the digital first banks to to get first to market?

James Varga: 15:56 It’s really difficult. We see a lot of the banks try to innovate around this space, try to understand but are still hampered either by their own risk aversion, or inability to develop things. A conversation I had just yesterday with somebody who works with one of the banks who’s taken like 200 people that couldn’t actually do anything within the framework of the bank, thrown them in a WeWork and said go build something. You know, because just being in that environment itself, which is pretty extreme being in that environment itself hampers any sort of lateral thinking any sort of blue skying about what the problem is. Banks also are very bad at using data. They have a huge amount of data and a lot of them would say that they’re really good at data, but actually using that data even for themselves, even their own data for themselves.

James Varga: 16:42 If they did or they were good at that, we would have seen a huge shift in the market already. So it’s going to be down to the industry is going to be down to the Fintechs to build propositions that solve some of these pains. But that in itself is a huge challenge. You know, being a Fintech isn’t an easy feat, especially as a B2C proposition with the cost of acquiring customers and all the rest of it. It’s a huge challenge. B2B Fintech, slightly easier for generating that adoption, but direct to consumer, incredibly, incredibly difficult. So then what you’re left with is the ones in the middle, the Monzos and the Starlings and N26, the Revoluts of the world that have big enough balance sheets that they can afford to build those big things and they’re all competing with each other, so it’s a lot of, well, they do it, so I’ll do it type situation. No different than the banks and everyone’s following and everyone’s not breaking away. I think Monzo has been doing good at breaking away. One of the the best innovations I saw at Monzo was if this then that (IFTTT) I thought was brilliant. If you could script your own stuff, that would be fantastic, but my wife or anybody I know wouldn’t be interested in that.

Andrew Grill: 17:48 They wouldn’t know what If This Then That was and how to use it. So I’m a big believer that open banking is actually a watershed when it comes to consumer data that the data has value. The fundamental premise of open banking is the data the bank holds on the customer belongs to the customer, not the bank. Is this the way you see it and is that what’s, what’s going to drive the innovation?

James Varga: 18:07 It’s absolutely the way we say it. We’ve always put the consumer at the middle of this equation. Whether that’s from an identity point of view and trying to onboard customers or it’s just that data control. I think we’ve seen time and time again where whether it’s Capital One or Visa or whoever it is, the idea that as an industry we can manage this for individuals is fundamentally flawed. People do too many different things for me to control your data. I just can’t do that. I’ve been in these conversations where where people go, well we need better governance and regulation and security services, authentication, whatever. It’s not that at all. There’s just no way to manage this for the population. The only way for us to solve it is to find ways to put consumers in the middle of that. So everything that we do and everything that we believe in is about being consumer centric.

James Varga: 18:54 And it’s been great to see with the GDPR perspective, our hat on and having seen open banking grow up from a sort of explicit consent perspective that it, that it is about the consumer controlling it. There’s still a lot of misconceptions around that. I think that’s one of the challenges, Open banking, I still get asked all the time, so there’s a big database that we can go and access all this information. No, you need to engage the consumer. That provides a bit of a challenge to these use cases and these, these Fintechs. We have to find reasons to get consumers to connect their bank account.

Andrew Grill: 19:28 You want for them to give consent because they realise the value exchange is there.

James Varga: 19:31 And the value exchange is huge. One of our customers is a big consumer lender in the states. We’re very fortunate and they share a lot of data with us and results. They’ve been using us for about three years. They’ve taken a process that was seven days down to about 30 seconds. So now consumers can get instant loans, instant decisioning, but the benefit to the business has been about a 40-45% increase in conversion, that’s almost 50% if I exaggerate, slightly increase in revenue while reducing their fraud, 7.5%.

Andrew Grill: 20:09 There’s a driver there. Someone on the board says, we drop fraud by 7.5%, That’s, that’s billions of pounds or dollars.

James Varga: 20:14 At that meeting with the bank a couple of months ago, and my joke went, if I could save you seven and a half billion pounds, I could buy a small island and retire in The Bahamas. You know what I mean? There’s a huge amount of impact, especially when fraud and risk keeps going up every year.

Andrew Grill: 20:28 Fraud is not just the financial thing of fraud. It is having to insure against that. So there’s a double hit that if you reduce fraud exponentially, you can reduce the exposure to the bank.

James Varga: 20:36 This is where I hope that open banking will get to, not only can the data be used on a personal level, credit risk is an obvious low hanging fruit, especially in this world, where in order to get credit, you have to have had credit. If we can enable those students and new to countries and people that have just never had credit. I’ve talked to very, very wealthy people trying to buy a house but have never had a mortgage and are unable to so they just pay cash. You know, I myself went into an Apple store to buy a phone about eight months ago. I like telling everybody this and I applied for it on financing because I wanted the Apple care and all the rest of it. Thousand pound loan essentially, and I failed the financing.

Andrew Grill: 21:14 Because they didn’t have enough data. You knew you were a good credit risk, but you failed some hurdle.

Andrew Grill: 21:18 It wasn’t my credit score because I have an almost perfect credit score. So something about them understanding me just wasn’t there. But if we can start to roll that up on a portfolio level and understand groups of consumers, think of how more effective a business, a bank or a financial services company could be, but all the way up to that level as you say, what if we could reduce the capital requirements of these digital banks by better risk managing their portfolio and what could they do with that money? You know, wealth management is a really interesting sort of conundrum for me and the amount of money it takes to set up these PFM products and the amount of money it takes to acquire customers and all the rest of it.

James Varga: 21:58 I think you can almost employ wealth managers to manually go through bank accounts and provide a couple of snippets or tips every month and actually get a better, more personalised results. So it’s about changing the dynamics of some of these situations.

Andrew Grill: 22:12 So because I’m Australian, I look at what’s happening back in my own market and it’s probably interesting parallel because as you said, there are open banking programs around the world. The first iteration of Australia’s consumer data right or CDR went live from July 1, 2019 and this is the first step towards their own Aussie open banking regime, which is touted as allowing individuals to own their data by granting them open access, etc. They are going to go beyond that though, not just banking, they’re looking at energy, phone, Internet transactions. What advice would you have for your Australian counterparts with what you know with open banking here in the UK and Europe?

James Varga: 22:43 Oh, that’s a tough question, isn’t it? The UK has been extremely successful at pioneering open banking it is referred to a lot around the world and a lot of these programs look towards open banking in the UK as a bit of a template. I think always being aware of the challenges now that open banking is going through some of the operational challenges or challenges that the business the industry is facing as they start to consume this data. Whether that’s 90 day reauthentication, or strong customer authentication. There’s still these little niggles that stop open banking really working for all the use cases. And I think the fundamental flaw there was maybe not focusing enough on the actual use cases. Not, not going down to brass tacks if you would.

James Varga: 23:29 Looking at the exact situation and then building up data from there and trying to do too much too early. It’s igreat great to see Australia do an open data approach, not just finance but utilities, insurance, pensions, everything else. Healthcare data I think is even wrapped in some of that, but you’re trying boil the ocean that has a risk that too many parties get involved. It becomes too complicated. You cater too much towards the industry and not to, to the actual use case of this data. You know, you try to protect that industry too much. And even in Australia, there’s, I think from what I understand a bit of a bubbling ocean right now between a few tech companies and a few industry organisations and the Payments Council and all the rest of it vying to control this network because it is such a hugely valuable thing, you know, by going that far beyond what it was, it’s like the California Privacy Act goes beyond GDPR. Does it become too much of a risk? I don’t know.

Andrew Grill: 24:23 It’s back to the consumers, I mean, at least here, because it started with banking and you can understand that and you understand the security things. If I then moved to Telco or Utilities, I’m less worried because the security, I don’t really care if you know how much energy I’ve consumed, but I do care what’s in my bank account. Maybe the Australian model because they’re trying to, as you say, boil the ocean. The consumers go, I don’t get the benefit, but if what they’re doing here is they start with one industry. Just a side question while I think about it, so where does the regulator sit here? I speak to a lot of companies and I say, look, you need to go and talk to the regulator and when I get a chance to sit in front of regulators, I say you need to think like a disrupter and you need to understand why they need to change the laws. Where have you seen the regulator get involved, roll their sleeves up and understand how they need to change legislation. I understand also the sandbox concept. You can actually do things that are illegal to test the market.

James Varga: 25:11 Absolutely. The FCA has, I think, been on a bit of a journey itself. As this whole fintech movement has started over the last few years as this disruption, as big data, as machine learning, and let’s not refer to AI or blockchain or anything else,

Andrew Grill: 25:26 You said the “B word” [blockchain]

James Varga: 25:29 I think they’ve realized that they’ve lived in a world where regulation has always followed the use case and now they’re trying to understand the use case or they’re trying to get up to speed. The sandbox has been brilliant. The innovation team within the FCA has been great. Even in Fintech Scotland up in Scotland, the FCA has seconded. somebody into that group and Nicola has been great. She’s out talking to more of the Fintechs, but there’s still a chasm of knowledge and awareness that is still out there. You know, and I think to your point, that’s a mindset difference. Traditionally risk-averse, only do what everyone else has always done. It’s the same challenge we see in banks themselves and credit risk underwriters or risk managers or whoever it is, they’ve always done the same thing, and you don’t get fired for doing the same thing. What we’re asking the industry to do, the banks to do, and everybody else, the regulators is to do things that they’ve never done before, and that’s extremely scary.

Andrew Grill: 26:25 And to this with other people’s money. That’s a really risky proposition. Absolutely. So this is the Actionable Futurist Podcast, so I’m going to hold your feet to the fire. What are three things our listeners should do next week to understand the opportunities to be realised from open banking?

James Varga: 26:41 Think about the data. First of all. For me always like to personalise things. If I can understand the benefit or the impact to me as an individual, that’s why I used the apple financing sort of story. I just went and paid cash for it in the end, but I still wanted to pay interest and finance it, right? Yeah. So I think, you know, related to yourself, think about the data and look at how you could use those situations to make an impact, and change. It’s too easy sometimes to boil the ocean or it’s too easy to think too grand. It doesn’t have to be. It can be really simple solutions like setting up an account aggregation facility that just emailed me a summary of my financial behavior. Like why do I need to categorize everything? Why do I need to worry about budgets and this and that?

James Varga: 27:25 And the other thing, is there something that you can use this data for? And most importantly, what is the impact of that? If we can target the convenience behavior, the requirements of consumers. First of all, that’s a big tick and people will go through the process. We see as many as 80% of people connect their bank accounts where there’s that really clear call to action around convenience. So people will do it. We just have to find the use cases for it, and open banking is just data. It’s how you use it that counts, so let’s start from that point of view. Let’s figure out what we can do with the data.

Andrew Grill: 27:55 So James, how can people find out more about you and your work?

James Varga: 27:58 You can come along to you can come to Twitter (@JamesVarga) Linkedin – James Varga. You could just Google for James Varga, and I think I still come up on most of the front page.

Andrew Grill: 28:09 I’ve learned a lot today, I hope our listeners have as well. Thank you so much for being on the show.

James Varga: 28:13 I appreciate it.

Outro: 28:19 Thank you for listening to the Actionable Futurist Podcast. You can find all of our previous shows at, and if you like what you’ve heard on the show, please consider subscribing via your favorite podcast app so you never miss an episode. You can find out more about Andrew and how he helps corporates navigate a disruptive digital world with keynote speeches and c-suite workshops

Until next time, this has been The Actionable Futurist® Podcast.