Every March 15, we celebrate World Consumer Rights Day – but while many South Africans know their basic rights, they still lack choice in one of the most important areas of all – their finances.
That’s why the recent launch of South Africa’s first Open Banking platform, Spot Money, is a watershed moment for local consumers, says Andre Hugo, CEO and Co-Founder of Spot Money.
“While Open Banking is a new concept for most South Africans, it’s going to revolutionise banking by making it faster, cheaper, and more convenient. Simply put, Open Banking gives consumers more control over how they manage their finances by working with any bank and financial service provider of their choice. Fundamentally, open banking makes money social. It puts people first. It’s good for humanity and great for business,” says Hugo.
In traditional ‘closed’ banking, each financial institution controls the information it collects about you. If you want to switch banks or open new accounts, it’s difficult and time-consuming to access your own financial data. With Open Banking, you take control of your own information, and can share it with other banks if you choose.
“The principle of Open Banking is that it should be easy. If you have an account with Bank X, and want to take out a loan with Bank Y, you usually must go through an exhaustive process, fill in forms, and have your credit score accessed – when that data all already sits with Bank X. So why can’t you just tell X to share your own data with Y and avoid all the hassle?” asks Hugo.
To enable this, Open Banking platforms further protect consumer rights by setting new standards in keeping consumers’ personal financial data and information safe and protected. It’s all about using data effectively, securely, and within the boundaries outlined by each customer. Critically, Open Banking is bank neutral. It works with any bank and financial service provider to give South Africans more choice when it comes to managing their money. It also gives customers the freedom of choice to select available offers from multiple service providers. But the biggest think about Open Banking is that it puts the consumer in full control of who they choose to share their information with.
“Remember, it’s always your choice. You choose which services you want, and which providers access your information. Modern customers expect a fast, convenient mobile banking experience. But they also want to know their data is safe, secure, and won’t be shared without their explicit consent. The only consent Spot Money asks for is to validate your identity and to access your credit score when you sign up, to be better able to match you with service providers and possibly give you better products and rates.”
“We don’t transfer any data to third parties. We only use your data to present offers to you that we think are right for you. You then decide whether you want to engage with those offers or not. Until then, the third parties won’t even know you exist,” explains Hugo.
Because Spot Money’s Open Banking platform is backed by Mastercard and Bidvest, it is governed by banking regulations, the Consumer Protection Act, and the Protection of Personal Information Act (POPIA). This creates an environment in which you can share your information without having to worry about how secure it is.
“With Open Banking, you’ll be able to budget, bank, find the best deals, manage all your various accounts and services, and shop for new products and services – all on a single platform. It also makes moving your money far easier by bringing all your payments into one place. This means being able to transfer money instantly between different bank accounts, credit cards, and savings and investments, and being able to pay family and friends in an instant on a range of platforms.”
All South African organisations had until 30 June 2021 to comply with POPIA, which will regulate how South African businesses handle, protect, and share consumers’ personal information.