“ No-one likes banks. However, despite damage to the sector ‟ s reputation following the financial crisis, everyone trusts their bank. Banks are built on the premise of trust,” adds James.“ The whole business, the regulatory framework in which they operate, is built on the foundation of trust, reliance and security. As a fintech business, we aim to leverage the trust that users have with their bank and share that trust with other organisations.
“ We want to provide online users with the same level of convenience and security that a passport brings when you travel.”
Through its DirectID offer, The ID Co connects a user ‟ s online profile with their bank, in effect helping the user prove they are who they say are, and allowing them to control precisely what information they share with any third party.
A regulatory watershed
In his role as CEO, James has spent the past five years playing an active part in the UK ‟ s Open Bank Working Group,
“ We began discussions with GSMA, the trade association for the mobile industry, as well as Verify. gov a number of years ago. As part of those discussions, we were invited by HM Treasury to participate in the development of the latest pan-European Payment Services Directive( PSD2) programme, where I co-chaired the data sub-group.
For fintech businesses, the ongoing adoption of PSD2 across Europe – a two-year process that is expected to be complete by January 2018 – represents a watershed moment. The key requirement of PSD2 requires banks to provide access, via secure APIs, to their customer accounts and provide account information to third party apps, if the account holder wishes.
“ It establishes standardised interactions between consumers and their banks – seamlessly and securely.”
The implementation of PSD2, which has been driven largely from the UK, will enable fintech businesses to accelerate disruption in a sector recognised for limited innovation and being understandably risk averse.
According to data from the World Economic Forum investment in fintech has soared in the past decade – from $ 1.8 billion in 2010 to $ 19 billion in 2015.
The majority of that investment has targeted the most profitable areas of global banking – namely personal and corporate finance. While fintech investment continues to be dominated by Silicon Valley, London remains the undisputed fintech capital of Europe, while pre-Brexit research by Ernst & Young singled out the UK as a whole as the world ‟ s leading fintech centre.