Dame Jayne-Anne Gadhia hits out at Anne Boden's criticism of Open Banking

Dame Jayne-Anne Gadhia, one of the City’s top businesswomen, has hit out at Starling Bank founder Anne Boden's criticism of Open Banking and said the technology will be transformative.

Gadhia, the former Virgin Money CEO once dubbed the “first lady of UK finance”, has been appointed chair of Ozone API, one of the pioneering UK Open Banking firms.

Ozone API helps banks, financial institutions and regulators implement Open Banking software. 

Earlier this year, it raised £8.5m million in a Series A funding round led by Gresham House Ventures, which it said would help international expansion as more markets move to Open Banking implementation.

Huw Davies, co-founder and co-CEO of Ozone API, said the appointment of Gadhia would be a “huge benefit” to the firm founded in 2017.

Open Banking is loosely defined as banks and financial institutions opening up data so that fintechs and other third parties can bring new products to market to help provide competition and more consumer choice.

Advocates say Open Banking (and Open Finance which encompasses more financial products and services, not just banking) is a game changer but detractors say uptake has been slow and it lacks innovation.

Tom Blomfield, Monzo co-founder and Boden have previously criticised Open Banking.

In 2021, Boden said Open Banking’s implementation had been “clunky” and the technology had been unable to break big banks’ stranglehold on the market, one of its key aims.

Boden said:

“Customers are not influenced to switch banks because they can take their data with them. Customers switch banks because they want a better service and are prepared to lose one bank and go to another and that’s why people join Starling.”

Asked about Boden’s comments, Gadhia said:

"That’s a very, very limited part of what Open Banking can do, it’s much more about the platform for helping people to use their data and understand their financial lives and build on them more effectively for the future.”

Gadhia referenced Snoop, the money-saving app she founded in 2019 which uses Open Banking technology and which she sold to Vanquis bank last year.

Gadhia said, generally speaking, everyday consumers are not excited about organising their budget, but Snoop allowed consumers, via Open Banking, to show customers what they had spent in previous months and what their future budget looks like.

She said:

“People really want that and, broadly, a lot of the banks in the past haven't been able to give that to their consumers.”

Davies said Ozone API whose clients include UK SME banking fintech Tide. was a growing international business

Referencing Tide, Davies added:

“Most SME customers want to connect their bank accounts to their accounting platforms, so they can manage their cashflow in one place, so the APIs are very well used and are a core part of the business.”

Asked which of the UK banks were leading the Open Banking charge, Davies namechecked Tide and NatWest, which is “doing some really interesting stuff around payments and around how these open banking APIs can allow their customers to more easily onboard to other services”.

He added:

“Open banking is a mechanism that actually most of the banks and financial institutions are now really relying on to make lending decisions.”