Spotlight on Bud: Jamie Campbell on aggregation platforms and the future of banking
As PDS2 and Open Banking change the competitive environment in Europe, Mapa will be speaking to FinTechs about aggregation services, open APIs, new propositions and partnerships with banks. The first feature in this series places the Spotlight on the aggregation platform, Bud.
The FinTech provider was only founded in 2015 but has already made a name for itself in the banking space. It provides a white-label platform that presents customers with an aggregated view of their financial services, as well as offers new financial products through a marketplace. Bud has won several awards for their innovative proposition and recently announced that they’re testing out a bank-branded app in collaboration with First Direct.
We asked Jamie Campbell, Head of Awareness at Bud, a few questions about PSD2, Open Banking and how Bud sees the future of banking.
PSD2 will encourage more competition in financial services. Do you think this is true?
PSD2 introduces banks to a new playing field where they’ve never really had to compete on before: competition for the attention of their customers. Banks have been competing at a product level for decades – cheaper rates, better services, etc. PSD2 regulations mean that customers can keep the ‘back end’ services (the current account) with their bank while they could potentially use any other regulated company to present their banking data. What this means is, services that customers enjoy using – WhatsApp, Snapchat, Facebook – could be where they go to get all of their financial information, lumping banks with the expensive and low-ROE parts of their business.
Moreover, PSD2 also includes the ability for these non-bank services to initiate bank-to-bank payments. So, if you want to pay a friend, you shouldn’t need to go to your bank’s website or load up the app.
Banks, therefore, need to focus on making the point of interaction with a customer the best possible experience. Otherwise, all communication, and with it, sales opportunities, with customers could be lost. Without adapting, the connection could be limited to complaints.
At its core, that is what Bud helps banks do. By integrating a marketplace of third-party product providers, banks can offer all services to their customers with a better user experience.
Bud chose to shift to working with banks as a white label platform. Do you think that there is still an opportunity for standalone aggregation platforms?
There are many ways to get products to market and each strategy has positives and negatives. It has to be aligned with the business objectives. Bud aims to be the most intelligent distributor of financial products, so our approach can be flexible to achieve that goal.
Stand-alone aggregation platforms have a lot to consider: customer acquisition, business model, revenue streams, trust… not to mention all the other things that go into running a successful tech company in the finance space. For Bud, we wanted to make a difference to as many people as possible in a way that was sustainable for our business. Banks wanted to compete more fiercely with new challengers; it made sense to work together.
As Open Banking era is upon us, what features excite your beta users the most?
Are people excited about their finances? Let’s say ‘interested’.
Simple aggregation is the starting point for open banking. The experiences that companies build on top of that is what is getting people interested. Notifications based on aggregate data to help customers switch utility providers, speed up credit applications or find a fee-reducing product. That’s the practical stuff people like.
For us, we are interested in the possibilities of receipts, new ‘walk-in walk-out’ payment experiences and automated product recommendations.
What will financial services in the UK look like in 5 years? Just how transformative will Open Banking be?
Open banking will grow steadily, like any adoption curve. We are not basing the success of this on the first months. As more and more people see, experience and share these practical benefits, it will become more and more popular.
In five years time, I don’t think it would be too bold to imagine the first ‘self-driving bank accounts’. Services that can automate the mundane decision-making associated with making the most of your money. We will see new big players in the market from retail to telco who will drive competition and innovation creating more options and more benefits for people.
Bud is one out of 18 providers that Mapa tracks on a regular basis in the wider market of account aggregation. For more information, get in contact with us or download a sample of our Aggregation Monitor.