Win up to £1m (equity-free), and exclusive access to our Open Up Data Sandbox.
From early 2018, “Open Banking” will be a reality in the UK. Most small businesses will, for the first time, be able to share their banking data securely with trusted third parties via API, and allow providers other than their bank to make payments from their account. It’s the most ambitious scheme of its kind anywhere in the world, and could lead to a revolution in UK retail banking.
The Open Up Challenge is a new challenge prize run by Nesta situated at the forefront of this open banking transformation. We’re inviting talented teams from across the world – fintechs, data scientists and others – to take this unique opportunity to develop next-generation services, apps and tools that create game-changing value for UK small businesses. In doing so, our goal is to drive greater transparency, choice and innovation for small business customers.
Challenge participants will receive a comprehensive package of support – including unprecedented access to cutting-edge data – to help them develop tools that transform how small businesses discover, access and use business-critical financial products like current accounts, loans and overdrafts.
What could these new tools look like to small businesses?
- They might include an easy-to-use service that recommends a better value loan or overdraft facility by scanning the market in real-time, based on the business’s unique transaction history.
- Perhaps the tool could populate a loan application on the business’s behalf, and go ahead and make the switch, seamlessly.
- Going further, a tool could recommend, based on the business’s financial behaviour, that rather than use a credit card each month, it might adopt a better value type of financing –like an invoice financing provider – and sets it up with the best one for the job.
- Or a tool that integrates with the business’s accounting software to do its accounts more or less automatically, complete its tax return and help it stay abreast of its tax liability. It may even use machine learning and Artificial Intelligence to predict potential problems, warn the user about an impending cash flow shortfall or a big shock like rising energy prices that might affect supply chain costs, and help get the necessary protections.
The challenge was selected by the Competition and Markets Authority as one of a package of remedies aimed at shaking up retail banking.
What is a challenge prize?
The Open Up Challenge is run by Nesta’s Challenge Prize Centre, through Nesta’s wholly owned subsidiary Nesta Enterprises Limited. The prize is backed by the CMA, with funding from eight of the UK’s largest providers of SME banking – Barclays, HSBC, Lloyds Banking Group, RBS, Santander, AIB Group (UK) p.l.c, Bank of Ireland UK and Danske Bank.
Nesta is a global innovation foundation with a mission to spark and shape new ideas to improve how the world works for everyone. Within Nesta, the Challenge Prize Centre uses prizes to stimulate innovative solutions to some of the biggest challenges we face. The Challenge Prize Centre is behind successful initiatives including the Longitude Prize and the UNDP Renewable Energy Prize.
Challenge prizes are a simple idea. A problem or opportunity is identified, the challenge is publicised and rewards offered to those who can deliver the best solutions. Challenge prizes harness the ingenuity of people with the right knowledge and expertise to tackle them.
The Open Up Challenge brings this proven model to data-driven innovation for small businesses. It builds on Nesta’s extensive activity at the cutting edge of fintech and data science thought leadership:
- Nesta’s pioneering research on alternative finance in the UK, beginning in 2010, preceded that industry’s rapid growth to become a mainstream source of finance for UK small businesses.
- The Open Data Challenge series comprised seven prizes to generate innovative and sustainable solutions to social challenges using open data.
- Tech Nation 2016 used cutting edge data techniques to map the UK’s tech entrepreneurship ecosystem.
- Nesta has been campaigning for many years to promote digital making and coding skills, promoting computer science in the curriculum, and code clubs of all kinds.
The Open Up Challenge is a £5m prize fund to reward next-generation services, apps and tools that create game-changing value for UK small businesses.
We’re looking for 20 winning entries from teams anywhere in the world that will use open banking APIs – newly available from early 2018 – to transform how UK’s five million small businesses discover, access and use business critical financial products, including bank accounts, loans and overdrafts.
The challenge has two stages:
- Stage 1 (Innovation) is aimed at ideas that deliver the most benefit to small businesses, and entries can be at an early stage or even just an idea. This stage will take place July – December 2017.
- At Stage 2 (Market Ready) we’ll focus on entries that are market-ready. This stage will take place March – September 2018.
For more about what we’re looking for, how to apply, key dates and our eligibility criteria, see Apply.
An independent judging panel, combining a diverse range of relevant expertise, will select winning entrants and determine prize awards.
- Cash Awards
- In the Innovation Stage you’ll get a £50k development grant up-front, and then share in a £1m reward pot if you’re one of up to ten successful Stage 1 prize winners.
- If you successfully enter the Market Ready Stage you’ll get a development grant from a pot of £500k for up to five teams, plus a share of a £2m pot if you are one of the final three Stage 2 prize winners.
- Exclusive Early-Stage Access to Data
- You’ll get access to our Data Sandbox, containing one of the largest anonymised UK banking transaction datasets ever released, and APIs aligned with the forthcoming Open Banking standard.
- Use the Data Sandbox to securely build and test your product so you can hit the ground running in 2018.
- Technical Support
- You’ll be able to access technical support provided by leading practitioners – covering legal and regulatory considerations, data, user experience and more – to help you get market ready.
Applications open 23 March 2017, and key dates are set out below.
Stage 1: Innovation
- 23 March 2017: Applications open.
- 31 May 2017: Applications close.
- 5 July 2017: Stage 1 development grant winners notified.
- 10 July 2017: Open Up Data Sandbox goes live.
- 9 – 30 November 2017: Window for Stage 1 finalists due diligence, including interviews.
- 7 December: Pitching day in London.
- 15 December: Stage 1 prize awards made.
Stage 2: Market Ready
- January 2018: Applications open (NB: Stage 2 will be open to new entrants as well as those who participated in Stage 1).
- March 2018: Applications close.
- April 2018: Entrant interviews in London*.
- April 2018: Stage 2 development grant winners notified.
- July – September 2018: Stage 2 finalists due diligence.
- September 2018: Stage 2 demo days in London.
- September 2018: Stage 2 prize awards made.
* Reasonable travel stipends will be provided to teams of up to two people travelling long distances.
Successful teams receive cash awards, technical support and exclusive access to our Open Up Data Sandbox.
There are two types of cash awards for finalists of the Open Up Challenge – development grants (to support you as you build your product) and prize awards (for the best prototypes or products submitted for prizes), both with minimal strings attached. This is a challenge prize, we don’t ask for equity and you keep all your IP.
Stage 1: Innovation
Applications open 23 March 2017 and close 31 May 2017:
- Approximately 20 finalists will be selected in early July 2017 to be awarded £50k each as a development grant to help build their product.
- Approximately 10 winners will be allocated cash prize awards from a £1m prize pot in December 2017.
Stage 2: Market Ready
Applications open in January 2018 and close in March 2018. You can apply to the Market Ready stage even if you did not apply to the Innovation Stage.
- Up to five entrants will be selected by May 2017 to be awarded development grants from a pot of £500k to help build their product.
- Up to three winners will be allocated cash prize awards from a £2m prize pot by October 2018.
Technical & Business Support
In Stage 1, you’ll be able to access a menu of technical support services on everything from user experience to regulatory considerations so you’re well-placed to to hit the ground running when open banking goes live. As part of a cohort of 20 who get development grants and access to the Open Up Data Sandbox during this stage, we’ll work with you to identify what you need and provide support where we can – whether that’s data security, data analytics or something else entirely.
- User Researchers and UX Consultants. We’re partnering with a Service & UX Design team to carry out extensive research into how the UK’s small businesses and sole traders manage their finances – including dedicating professional user researchers and user testers to spend 1-on-1 time with every prize entrant focused on their users and product.
- Top Legal Advice To Help You Navigate Financial Regulations. You’ll be able to talk to some of the top lawyers in finance who will help you stay compliant with data privacy legislation, data processing requirements, and regulations related to handling of financial information or brokerage of financial products – and all other legal and regulatory issues need to know about.
- Help Growing Your Business. We’ll help you to navigate the world of UK fintech – who might invest in you, who might partner with you, which journalists will write about you – and we’ll super-charge your network with events and introductions to influencers.
Sign up to our mailing list for updates as we appoint experts to deliver the technical and business support.
Exclusive Early-Stage Access to Data and Test APIs
Our Open Up Data Sandbox provides access via API to real anonymised transaction data and other kinds of data to help you design and test your propositions.
We have a close working relationship with Open Banking Limited – the body responsible for building the final public Open Banking APIs – and the Sandbox will, so far as possible, reflect the environment awaiting you in 2018 when the APIs go live.
The Sandbox is being developed by Capco, our technical partner, with input from the fintech and data science community. Check out the information below and get in touch with your feedback (open a live chat here or email [email protected]).
The Sandbox will go live on 10 July 2017.
Data Available in the Sandbox
Through the Sandbox organizers expect you to be able to access:
- real anonymised account and transaction data;
- product and other reference data provided by UK banks; and
- service quality and other supplementary data provided by Business Banking Insight and other third party data providers.
Small Business Data
- a full list of business current accounts, including flags for promotional rates;
- a full list of unsecured loans below £25,000 that they currently have, current interest rates paid and whether they have insurance for the accounts;
- features of the accounts they currently hold, such as the presence of internet banking and relationship managers;
- transaction data going back several years (number of years to be defined), including the types and amounts of each transaction, along with some information on the counterparties
- end-of-day account balances;
- overdraft limit changes to the account;
- a breakdown of monthly fees that have been incurred by the account, listing the type of fee and the number of events triggering it;
- an indicative credit rating; and
- background information including age, location and SIC code and anoymised to a suitable level.
- branch data, including: locations of fixed branches, routes of mobile branches, opening hours, services provided in each branch, types of customer eligible for using the branch, and notices of any planned closures;
- ATM data, including locations with both postal address and coordinates, environment and access restrictions, services and languages supported, and currencies and denomination of notes available;
- data on business current accounts offered by the bank, including: eligibility criteria, fees and services, pricing structure and promotional terms;
- data on small business loans offered by the bank, including: eligibility criteria, fees, terms, minimum and maximum loan amounts and an indication of pricing based on tiers;
- data on commercial credit cards offered by the bank, including: eligibility criteria, fees, types of card, features, credit limits and balance and cash advance rates.
Functional View of the Sandbox
Below is a description of the functional view of the Sandbox.
You’ll draw on three sets of APIs:
- Reference APIs: expose reference data (ATMs, branches, personal account offerings, business account offerings, loan offerings and credit card offerings) from each bank.
- SME APIs: expose information about the small business users you create (location, SIC code, bank accounts, transactions).
- Dashboard APIs: provide the business logic for accessing the Dashboard User Interface (more on that below).
There are two ways you can interact with the Sandbox: via a Dashboard User Interface or via an application you’ve created.
The Dashboard User Interface is a website that you can use to:
- self-register to get access to the Sandbox;
- authenticate and retrieve an API key to call the dashboard, reference, and transaction APIs;
- create small business user profiles linked to anonymised real world data (including bank accounts, transaction data, location, SIC code and turnover) – then log in as the user to retrieve their information;
- log in as small business users to retrieve
- oversee analytics on the number of endpoints you are calling;
- view the throttling restriction on the number of calls you can make to the sandbox;
- view interactive API documentation detailing all the endpoints and their fields;
- view which APIs are up to date with Open Banking Limited’s latest specifications for the real-world APIs coming in 2018, which APIs are not yet aligned, and which APIs are unique to the Sandbox (we’ll add some APIs to simulate accessing data you’ll get from small business users when you go live); and
- view information about the Open Up Challenge, including events, important dates, T&Cs, contact information and other updates.
Technical View of the Sandbox
Below is a description of the technical view of the Sandbox.
- Users are able to register for an API key by visiting the Sandbox portal in their browser.
- On the portal users can additionally view API documentation and dev notes.
- Once users have created their account they can use the API key to begin consuming the APIs.
- Each API is mapped to a distinct business functionality.
- The service attempts to access the data via secure connections.
- Banks upload flat files with the data to the cloud file system.
- Anonymised small business and Business Current Account data can be loaded from flat files straight into the database.
Below is a high-level API specification based on the Reference and SME APIs. Note that the API specification is still under development. Sign up tomailing list to receive updates.
You’ll need to register for the Sandbox portal to get your API key.
- /unsecured-sme-loans; and
- /transactions – get transactions and other information;
- /business-current-accounts – get small businesses’ current accounts;
- /loans – get small business loan data;
- /creditcards – get small business credit card data; and
- /sme/login – log in as a small business user.
You’ll be able to access a maximum number of records over the 20 weeks that the sandbox will be live, and we expect this limit to be approximately 10,000 records.
The flow rate of access will be flexible, with a larger amount available earlier in the process so that you can explore what the data looks like and test your propositions.
In line with our security commitments, we’re preventing bulk downloads of data.
The Sandbox has been designed with security in mind. Contact us (webchat or email [email protected]) to discuss our data security measures and your responsibilities should you be accepted onto the challenge.
- All connections to the APIs will be encrypted (HTTPS).
- All internet facing APIs will have both token based authentication (JWT) as well as an API key.
- All services will run within a Virtual Private Cloud, providing network segregation and security.
- Secure access to the servers using security groups & network access control lists.
- Multi factor authentication will be used.
- Data will be stored encrypted.
- Security auditing and logging of all user actions will occur.
- A dedicated Key Management Service will be used for the management of cryptographic keys, e.g. database encryption.
- Two penetration (pen) tests will be completed during the build of the Sandbox.
Technologies & Languages
- Microservices using Docker containers.
- Multiple AWS services: API Gateway, Elastic Beanstalk, EC2 Container Service, IAM, CloudWatch, CodeCommit, CodeDeploy, CodePipeline, SNS, S3, CloudFormation, CloudTrail, Cognito, RDS, VPC, CloudFront, Route 53, Lambda, Elastic Load Balancing, Auto Scaling.
Sandbox Terms & Conditions
If you are accepted onto the prize as one of our 20 partipants, you’ll need to sign an Agreement with Capco, the technical partner responsible for building and maintaining the Open Up Data Sandbox.
The Agreement will outline ways of working and mutual responsibilities. T&Cs for using the Sandbox will including (among other things):
- Access to the Sandbox is only granted for the purposes of the Open Up Challenge.
- Capco will ensure the security of the Sandbox and your data.
- All Intellectual Property Rights in any material (including software) you provide to Capco will remain yours.
- Capco will ensure the confidentiality of your information, including information relating to your products, prototypes, strategies, plans, and your history of activity using the Sandbox.
- You’ll need to implement appropriate technical and organisational measures to prevent (without limitation) unauthorised or unlawful processing, accidental loss, destruction, damage, alteration or disclosure of data in the Sandbox.
- You’ll be subject to liability associated with data leaks or breaches due to use or misuse of the Sandbox and/or its data. Your liability will be capped at an appropriate level.
- You’ll need to agree to delete data obtained from the Sandbox at the end of the challenge.
- You’ll need to abide by any restrictions required by the banks who have provided data to the Sandbox.
- You may not share data obtained from the Sandbox with third parties are more generally you’ll not allow the data to be used in any ways incompatible with the purpose of the challenge.
- Your access to the Sandbox will be controlled and throttled in order to limit the total amount of data you can access over the course of the challenge.
- Capco warrant that the Sandbox will function throughout the challenge – in case of interruptions, Capco will use reasonable endeavours to keep the Sandbox operational.
- Capco will treat the 20 participants fairly and equally and will ensure all participants have the same access to the Sandbox.