In a stunning example of how the collaborative nature of open banking can benefit consumers, a small group of fintechs recently worked together to serve the self-employed impacted by COVID-19 in the United Kingdom.
Sadly, the human consequences of this pandemic go well beyond health concerns. The economic impact on financial markets and a wide swath of industries has been catastrophic.
This has had immediate consequences for many people, typically those least well-paid or self-employed contractors in the gig economy. While the UK government, like many others around the globe, has announced unprecedented economic measures to shore up these individuals in the short term, the paperwork slows the process and delays access to the much-needed funds.
A team of thought leaders from the UK fintech community got together to find a way to circumvent this delay. In a 48-hour time period, they built a working proof of concept that allows sole proprietors in the UK to self-certify that they have lost income and prove their previous 12 months of income by connecting to their bank account. Their recent transaction history provides proof that their income has been negatively impacted as a result of the pandemic. The solution offers real-time verification, certified income loss, income/wage subsidy level established and disbursement of subsidy.
This innovative solution is possible because of open banking. While this specific proof of concept isn’t publicly available at this time, it works and is ready to be deployed, offering more than 5 million self-employed individuals in the UK much quicker access to the funds that they need through the COVID-19 crisis.