Since 2014, Moneyhub has helped a wide range of organisations use Open Banking and Open Data APIs to improve how they interact with people.
In 2024, we became a Crown Commercial Service Supplier of Open Banking for the UK government. This allows us to help government agencies improve the financial wellness of people, their businesses and their communities.
In this article, we’ll explore how Open Banking and Open Data APIs can help government agencies drive efficiency, reduce costs and improve services, and how Moneyhub could help.
Transforming payments with Open Banking
Open Banking enables financial data to be shared securely between a bank and a third party.
In the private sector, this has helped streamline processes, reduce costs and improve customer experiences. For example, the green investment platform Sugi uses APIs (powered by Moneyhub) to enable retail investors to connect their portfolios to the app and check the carbon impact of their investments. And in other areas like accounting, some software applications use Open Banking to automatically import bank transactions, freeing up customers’ time from manual data entry.
When it comes to payments, government agencies often rely on card payments, bank transfers and cheques. But these methods are slow, prone to errors, require significant investment in security solutions, and are costly to manage. Open Banking can address these issues by enabling direct, secure and instant transactions.
For government agencies, the potential use cases of incorporating Open Banking are vast and varied:
Processing tax refunds: Tax refunds could be processed faster and more securely using Open Banking. Instead of mailing cheques, which is slow, resource-intensive and prone to fraud, HMRC could use Open Banking to initiate instant payments directly to taxpayers’ verified bank accounts.
Enabling recurring payments: Council tax payments could be simplified and automated with Open Banking. Local councils could use Open Banking to set up and manage variable recurring payments more efficiently, reducing the risk of missed or incorrect payments, which resulted in three million people taken to court for council tax debt between 2021 and 2023 in England.
Processing benefit payments: The Department for Work and Pensions (DWP) could use Open Banking to streamline the distribution of Universal Credit and other benefits. This could have prevented half a million claimants from missing their child benefit payments due to a batch processing issue at HMRC. Securely accessing claimants’ bank account information (with their permission) could enable payments to be calculated and processed more efficiently.
Assessing grant applications: A government agency providing grants or loans to individuals or businesses could use Open Banking to assess applicants’ financial circumstances more accurately. This could allow the agency to make more informed decisions about the applicant’s eligibility and suitability.
Student loan management: Providing a streamlined affordability check could significantly reduce costs when processing applications for student loans and maintenance grants. Open Banking provides an efficient way to disburse those funds, and when combined with Moneyhub’s award-winning financial wellness app, students are better informed and able to manage their finances, both during and after student life.
Collecting fines: A local council could use Open Banking to collect fines more efficiently. By enabling direct account-to-account transactions, the council could minimise the risk of payments being misallocated or lost in the system, reduce processing costs and improve security.
These use cases demonstrate many of the benefits of Open Banking for government agencies: lower administrative costs, faster processing times, improved efficiency, increased accuracy, enhanced security and better societal outcomes.
Empowering government agencies with Open Data APIs
Open Data APIs can play an important role in enhancing government services by providing access to a wide range of datasets and insights. They’re different from Open Banking APIs in that they extend beyond banking data, encompassing sectors including healthcare, education and travel.
Again, it’s the private sector that’s led the way in demonstrating the potential of Open Data APIs, using them to create many innovative products and services. For example, the weather app Dark Sky (acquired by Apple) used Open Data APIs from sources like the National Weather Service to improve the accuracy of its hyperlocal forecasting models. And navigation app Citymapper uses Open Data APIs from local transport authorities to integrate real-time bus and train data and improve its trip planning capabilities.
A key benefit of Open Data APIs for government agencies is in easily accessing valuable data to inform decision making, at both the national and local level.
Here are some more potential use cases:
Identity checks: Government agencies could use Open Data APIs to access a wider range of data sources. This would enable them to verify an individual’s identity more comprehensively and, therefore, more accurately, for example with Moneyhub’s account verification service.
Affordability assessments: Open Data APIs could help government agencies assess an individual’s financial situation more accurately when considering their eligibility for certain services or benefits. For example, local authorities and housing associations could use credit reference agency and utility provider APIs to assess a tenant’s affordability and financial circumstances more accurately, reducing evictions and arrears which partly contributed to local councils facing a total funding shortfall of around £550 million in 2023.
Fraud verification: Government agencies, such as the DWP, could reduce fraud by using Open Data APIs to access a wider range of verification sources. This would allow them to cross-reference claimants’ information with data from HMRC, credit reference agencies and other sources when processing benefit claims.
Eligibility checks: Open Data APIs could be used to streamline and improve the accuracy of eligibility assessments for various government services. For example, the Student Loans Company could use Open Data APIs to assess an applicant’s household income, assets and other factors. This could greatly speed up the assessment process and reduce the need for manual verification, reducing operational costs and greatly improving the applicant experience.
Open Data APIs could improve the operational efficiency of government agencies in similar ways to that of Open Banking: reducing administrative costs, enhancing security, streamlining processes, improving accuracy and ultimately delivering better services and outcomes for citizens.
How Moneyhub supports government agencies
Moneyhub offers a comprehensive suite of Open Banking and Open Data API solutions tailored to the needs of government agencies.
Our services can be used by both national and local government agencies:
National government: Our Open Banking solutions can help central government departments, such as HMRC and the DWP, process payments more efficiently, reduce fraud and streamline the distribution of benefits. Our Open Data APIs can also provide valuable insights to inform policy decisions and improve the delivery of public services.
Local government: Our Open Banking services can help local authorities streamline the collection of payments, such as council tax and parking fines. Our Open Data APIs can help with assessing eligibility for local services, supporting vulnerable residents and improving the delivery of local public services, such as housing and social care.
In addition to our technical solutions, we provide expert guidance and support. We work closely with our clients to understand their unique challenges and develop tailored strategies to maximise the benefits of Open Banking and Open Data APIs.
By partnering with Moneyhub, both national and local government agencies can leverage Open Banking and Open Data APIs to enhance organisational efficiency, drive innovation and improve the lives of UK citizens.
Our vision at Moneyhub is to improve the financial wellness of people, their businesses and their communities. Our industry-leading expertise and extensive experience in both the private and public sectors make Moneyhub the ideal partner for government agencies looking to transform their services for the public good.
Contact us to learn more.
References
1 – https://inews.co.uk/news/council-tax-debt-3-million-uk-2387586
2 – https://www.lgcplus.com/finance/districts-forced-to-make-impossible-decisions-over-service-cuts-24-10-2023/