Your data is an important personal and precious asset and it can increasingly be used to help you make more informed financial decisions.
Analysing your spending patterns from your bank accounts can give you a better idea of how much you can afford to save and your chances of accessing financial products such as a mortgage or loan.
It can be complex and time consuming to do this yourself. Fortunately there are companies and apps using open banking technology – a secure way for you to access your bank data through third parties – to help you reach your financial goals.
Nesta Challenges and the Open Banking Implementation Entity (OBIE) have been running the Open Up 2020 Challenge since last year to support innovative businesses using this technology to help users make the most of their money.
Four winners have now been named from 15 finalists initially selected from a pool of more than 100 entries.
Each finalist received £50,000 to grow their product and the winners will now get an additional £150,000 prize for further development.
Chris Gorst, director of challenges, at Nesta Challenges, says: 'The winners of the Open Up 2020 Challenge are all using the latest technology to help people overcome some major financial challenges.
'With people even more used to managing their finances online since lockdown, there is huge potential for these apps to help many more people.'
Here are the solutions that have been awarded for their innovative ways to unlock the power of open banking to help people make more of their money.
Getting ready to climb onto the property ladder with Mojo Mortgages
Affordability is one of the biggest stumbling blocks to getting on the property ladder.
Online broker Mojo Mortgages, which launched in 2018 to create a hassle-free way to find and apply for a home loan through the internet, had already been exploring open banking since last year to address the affordability issue.
It saw the opportunity to enter the challenge and receive support to develop MortgageScore™, which uses open banking and a soft search of an applicant's credit file to give an indication of how ready they are to get on the property ladder and how a lender would view them.
Richard Hayes, chief executive of Mojo Mortgages, said the competition provided the ideal environment to work on an idea that could be deemed risky for a startup.
He says: 'Working with the supportive team at Nesta Challenges gave us the budget and opportunity to get the idea off the ground.'
The product assesses your income and expenditure and provides a score out of 1,000 alongside insights into how likely you are to be accepted for a mortgage, the type of rate you could be offered and changes you could make to boost your chances of success.
Hayes says: 'There is a big knowledge gap around affordability.
'A lot of people focus on the credit report, which tells you about the past.
'Open banking provides access to financial statements that can tell you about the future.
'By combining both, our product gives customers a score and effectively tells them how a lender sees them.'
Building a savings habit with Plum
It can still be hard to know how much to save even when there is support available but there are apps using open banking to help get you started, often without even realising.
Plum is a digital smart savings app that links to your bank account. Its algorithm analyses your income, expenses and spending habits to set aside an amount it calculates you can afford to save.
The ‘AI assistant’ had only just began using open banking when it became a finalist but since then has embraced the technology to provide spending reports, insights into where users may be getting overcharged by bills and an energy and broadband switching service.
Victor Trokoudes, chief executive of Plum says: 'Now all our customers are linked via open banking and we've been able to start realising our vision of a super app that brings your financial life together in one place.'
Learning financial skills on the job with Wagestream
Learning new financial habits can be tricky but the workplace is increasingly becoming an area to do this.
Wagestream is using open banking to create an environment where you can use your salary to budget for certain items and save.
Wagestream already allows staff whose employers are registered with it to access a portion of their salary as it's earned.
With the support of Nesta Challenges, it has now built an open banking-powered tool that will let employees allocate their earnings to certain bills, save directly from their pay and access financial education resources.
Peter Briffett chief executive of Wagestream says the aspiration of the Open Up 2020 Challenge to increase the growth of open banking and introduce it open banking to a wider audience was shared by his team.
He adds: 'It is a much fairer system if the employer provides the provision of finance rather than a bank as they are not just doing it for profit.
'We learned a lot from the other parties and Nesta Challenges […] The Open Up 2020 Challenge helped us invest in delivery of the product and access experts in behavioural insights so we know how users are likely to react to certain situations.
Saving as you spend with Moneybox
Offering a range of saving and investment products including ISAs, savings accounts and pensions, smartphone app Moneybox enables customers to set money aside in the way that suits them best using round ups from card transactions, regular deposits or one-off payments
Ashleigh Petrie, head of product at Moneybox, says the Open Up 2020 Challenge allowed the app to gain insights into how to overcome the inertia of getting people to start saving and investing.
It uses open banking to link to user accounts for its round ups service and is keen to explore allowing customers to set their own payments through the app, known as variable recurring payments, with the technology.
Petrie says: 'We want to continue with our mission to help people save and invest for their future, and we believe that there is an even bigger role that open banking can play in this.'
Imran Gulamhuseinwala, trustee of the OBIE, says tools such as these are more important than ever given the hardships caused by Covid-19.
He adds: 'The judges were very impressed with the winners' focus on helping their customers, particularly in this challenging climate, and their commitment to improving financial wellbeing.
'With 2m active monthly users of open banking and growing strongly, we wish the winners every success in growing their offerings and reaching more people.'