Where will open banking take the employer/ employee relationship?
It will help people to get better deals on things – but they need to understand that they now own their banking data, and that they can turn access to it on and off whenever they want.
Consumers will get savvy to the benefits being offered to them – and that includes employees. Retailers will send them a message saying, ‘I can give you a better deal but to do so, will you share some data about yourself with a third-party, FCA-regulated organisation, for a week?’ If the consumer, who wants the better deal, agrees then the retailer can understand much more about them and work out the best deal they can give them. For example, if they are spending more than £100 a week on petrol, the fuel company can offer a big discount and get all their business.
So where do employers fit in?
The big incentive for employers is that it takes the guesswork out of understanding what their employees need.
Some employers offer 300 or more voluntary benefits, but there is no way they are all relevant to the employee. If employees are encouraged to sign up to a white-labelled service like ours, these can be filtered so they receive the ones most relevant to them. Retailers can no longer track people’s movements on the Internet in the way they have been doing. But the employer/ employee relationship is pre-established, and there is a level of trust there already.
Won’t people hate their employer being near their personal finances?
The employer/employee relationship should never be underestimated. People might respond to a survey saying they don’t want their employer near their finances, but if the employer can provide an environment where they can make it easy for their employees to manage their money more efficiently, they will engage. Employers need them to – they don’t want them unable to afford to retire.
What data insights might employers get in future?
They will get anonymised data – at a really granular level, down to the sorts of income multiples employees have with their mortgages – that will enable employers to understand how to direct their benefits spend.
But do employers really want to broker the trading of their employees’ personal data so they can be used as marketing targets for retailers?
It could actually work out very well for all parties. Wouldn’t it be brilliant to bring in a retailer like John Lewis into the mix and share the revenue from the sale of the employees’ data? That could be a split of a third to the employer, a third to the employee and a third to the data hub manager. Employers could use that money for all sorts of things in the benefits package – it could go into the employee’s pension, for example.
And we are talking about things that people buy anyway. And if employees don’t like it they can turn it off. But then they don’t earn any revenue.