By Miles granted open banking licence by FCA

Pay-per-mile motor insurance provider, By Miles, has been granted permission by the Financial Conduct Authority to operate under open banking regulations, enabling it to access a wider range of financial data by using APIs.

The firm said it was the first insurtech to receive such a licence from the FCA. Last month, the regulator issued a call for input on the opportunities and risks presented by open finance in financial services.

As part of the authorisation process, By Miles had to demonstrate its comprehensive approach to data security. The firm is expected to make use of the licence in the first half of 2020.

It stated that open banking will enable it to focus on assisting vulnerable customers, to offer existing clients with more manageable means of paying monthly statements, as well as to reduce occurrences of fraud by automatically verifying a customer's identity.

Co-founder of By Miles, James Blackham said: “With Open Banking, we’ll be able to show that a customer has been able to make their regular insurance payments over the past year.

“This will mean drivers who could really benefit from the flexibility of a pay-by-mile policy can now be offered one, in instances where their traditional credit score might have suggested otherwise,” he added. “By giving individuals the ability to control the information associated with their accounts and initiate payments, third parties (including startups like us), can help them access better deals.

“The insurance industry has a lot to learn from open banking, particularly about becoming more open and transparent with customers. If they embrace this new world, insurance companies will be able to design more flexible products that are better tailored to the people that use them, and more people will be able to access them.

By Miles provides pay-as-you-drive car insurance and targets motorists who drive fewer than 7,000 miles a year. The company launched a Tesla cover last month.

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