By Sara Korchmaros is CCO of the retail technology platform Recash

It has been the quietest of revolutions. Two and a half years ago the Competition and Markets Authority unveiled, with surprisingly little fanfare, an initiative that has since shaken up the way UK banks hold customer data – and who has access to it.

Now that initiative, Open Banking, is finally on the verge of delivering its full potential.

Open Banking has subtly modified the strict rules that govern the use of bank customers’ financial information. By granting limited access to this data to trusted, and vetted, third party businesses, it has successfully spurred the creation of new products and services that consumers find useful.

Its original vision was to inject a hefty dose of innovation into the UK’s banking sector, which had long been dominated by a few well-established heritage banks.

That’s not to say innovation was not happening. The shift to chip and PIN, and then on to contactless card payments, as well as changes to ATM machines and the arrival of mobile banking, are merely the most visible examples of incremental technological progress.

The fintech revolution of a decade ago upped the ante, with City bankers joining forces with tech developers to create countless new and innovative ways to help people manage and invest their money.

Open Banking was initially conceived as a way to extend further the creative momentum of the fintech revolution. Tech developers who registered as ‘Regulated Providers’ were given access to previously confidential banking data they could then use to create groundbreaking new products.

Fast forward to today and the results of Open Banking are everywhere. Consumers can see all their finances in one place, and the financial services sector is packed with new and exciting tech-led offerings, from budgeting apps to saving tools and investment platforms.

However, despite the huge strides made, much of the innovation has been focused on financial services. The original vision for Open Banking – to extend the benefits to other sectors – has remained largely unfulfilled.

Until now that is. Other sectors are finally starting to reap the rewards, and the economic upheaval of 2020 has made these rewards even more valuable.

The retail sector is a case in point; and this summer saw the UK launch of Recash, a retail cashback app powered by the Open Banking freedoms that was originally developed in Hungary.

Recash allows consumers to quickly upgrade their bank card into a cashback card, automatically transferring money back to them when they make a purchase at a participating store.

For the retailers, Recash offers a unique window onto individual consumers’ financial habits, including how much and when they spend with rival brands.

These insights can then be used by the retailers to run highly targeted cashback promotions through the app, each of which can be perfectly calibrated to appeal to consumers’ tastes and shopping patterns – including those who typically shop at competitor stores.

Previously only tech giants like Google or Amazon could hope to gather such fine detail on consumers’ tastes, through their online search and purchase history. But Open Banking is now enabling retailers of all sizes – both online and offline – to access, and act on, vital intelligence like this.

Retail sales in the UK bounced back strongly in July, surging past their pre-pandemic level. But consumer confidence remains deeply fragile and bricks and mortar stores are facing an uphill struggle to control costs, with even flagship names from the British high street such as Marks & Spencer, Boots and John Lewis all having to close stores or lay off staff.

Given the scale of the challenges the retail sector currently faces, it needs all the help it can get. Emergency Government support alone will not be enough, and the brands most likely to survive and thrive are those agile enough to adapt to consumers’ changing tastes and acute price sensitivity.

Fintech innovation and Open Banking have transformed the financial services sector over the past decade, enabling it to emerge both leaner and stronger in the years following the Global Financial Crisis. The financial sector’s pivotal role in the UK economy as a whole means this progress has delivered broader growth too.

But now it’s time for Open Banking to deliver on its full promise, and spread more direct benefits to other sectors. As its potential is at last realised by retail and other sectors, Britain’s battered economy needs Open Banking like never before. Its coming of age can’t come soon enough.