Original text here from Patrice Bernard (LinkedIn)
The limited use of banking data that regulators helped open up to new applications is an undeniable marker of the — admittedly relative — failure of the European Union’s second Payment Services Directive (PSD2). The recent partnership signed between Algoan and Owen illustrates one of the many opportunities that remain largely unexplored.
Until now, setting aside personal finance management tools (whose popularity remains stubbornly marginal), account access services mandated by regulation have been used primarily — at least in the consumer segment — to assess a borrower’s ability to repay a loan or a similar financial commitment. Their success in that context is remarkable, but it falls far short of the innovation boost originally promised by the law’s proponents.
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With Owen, the narrative finally changes. The insurtech startup enables its clients — providers of payment services — to personalize the insurance offer they wish to bundle with their products based on the consumer’s actual situation. For some time now, it has developed a multi-tier model, offering coverage of varying scope, which can even be supplemented, where relevant, with specialized individual options.
Thanks to the data provided by Algoan, if a customer agrees to grant access to their bank accounts at the time of subscription, it becomes possible to pre-select coverage that best matches their behavior and living conditions. This avoids offering everyone the same insurance — parts of which may be irrelevant — or forcing users to choose the most suitable option themselves, a step that introduces unnecessary friction into the customer journey.
Official communications do not specify the use cases being considered, but it is easy to imagine several characteristics that could define different variants of a policy linked, for example, to a payment card. Beyond the basic income criterion — which might reserve premium coverage for higher earners — insurers could, to cite a few straightforward examples, promote travel insurance only to customers with a significant travel history, enhance guarantees for those who regularly make high-value purchases, or add online fraud protection for heavy e-commerce users.
As the deadline for FiDA — the extension of open banking to all financial products — draws closer (assuming everything proceeds as planned), it is worth remembering the value these regulations are meant to deliver beyond mere data-use transparency: the ability, through analysis, to understand a consumer’s situation and habits (with their consent, it bears repeating), in order to provide offers that are genuinely better aligned with their needs.
