Innovation foundation Nesta has launched a £5m prize fund aimed at helping digital entrepreneurs to create next generation services, apps or tools that will enable small firms to discover, access and use core financial products.
Nesta’s “Open Up Challenge” will select 20 businesses that will use the UK’s open banking application programming interfaces (APIs) to make banking more transparent, open and competitive for the benefit of consumers. As well as the prize money, the winners will be offered other incentives, such as mentoring or help with marketing.
As a spokesman for Nesta commented, they are looking for entrants who can combine insight into the problems small businesses face with technological skill and commercial know-how. The Challenge offers entrants a gateway to innovation through up-front grants and prizes from a £5m fund, business support from key influencers in the industry and exclusive access to our Open Up Data Sandbox to test and develop their ideas.
He added that the coming year marks a unique moment in which technology and regulatory change combine to drive innovation in small business banking. Entrants to the prize will have the opportunity to shake up small business banking by transforming the way small businesses discover, access and use core financial products and services.
However, he highlighted that open banking is still over a decade away from mass adoption by consumers, although it is an inevitability now that regulators in the UK and Europe have ramped up implementation of new standards, such as PsD2 (Revised Payment Service Directive), which will require banks to open up anonymised customer data for third parties to access via APIs.