The future of banking is bright neon coral

Iwas sitting in the rattling wooden carriage of a heritage steam train on the Isle of Man when it became clear the future of banking was already here. Forget admiring the passing countryside as we raced by; my travel companions and I were instead staring at our phones, sorting out our spending on hotels and rounds in the pub. Rather than take out cash, or make a note of who owes what to send from bank accounts when we returned home, we sorted it all out digitally in minutes, flinging virtual money to each other from the comfort of an old-fashioned train carriage.

British banks only recently started to offer easy ways to transfer money to friends, well behind their peers in other countries. When I first moved to London from Canada 15 years ago, my parents could email money to my account, while banks in countries such as Kenya and Rwanda led with mobile services via SMS well before the rest of us caught on.

Given that, the big British banks should be grateful that Open Banking is being forced on them – if it wasn’t, they’d risk falling further behind still. Even before PSD2 forced my bank to spit out an API to support clever new services and apps, I was already on the road – or the rails, as the case may be – to modern banking thanks to British startup Monzo.

Monzo’s bright coral cards always attract attention at shops – they are nigh on neon, making them impossible to miss – but it’s the services that convinced me to sign up. Not only is there no foreign currency charge, handy for frequent travellers, the app is a perfect example of mobile banking. Everything just works. Transactions are instantly noted, for example, making it simple to manage spending; my main bank’s app isn’t bad, but it takes days for my spending to appear.

Monzo didn’t wait for Open Banking regulations to kick in before offering this glorious glimpse at the future of finance. Instead, it first worked as a pre-paid credit card, before evolving to an actual bank with fully functioning accounts. If my main, more traditional bank doesn’t up its digital game, there’s increasingly little reason to stick with its creaky, slow ways. By forcing the big banks to let startups offer innovative services on their behalf, Open Banking may just keep them relevant a little bit longer.