The Department for Work and Pensions (DWP) is running a proof of concept project on the use of open banking in the management of universal credit.
It has signed a £104,000 contract with open finance specialist Ecospend Technologies for work on a six-month project which began in May using the company’s Datalink solution.
This will facilitate the sharing of data, with Datalink enabling DWP’s customers to consent to Ecospend to access and share information on their bank accounts and transactions for supporting their applications for universal credit.
The project is focused on three Jobcentres, with Ecospend delivering every aspect of the technology infrasturucture for account information services.
Information attached to the contract award notice says: “Considering the demographics of UC claimants, it is expected that consent rates will be substantial. To this effect, DWP will benefit from a robust dataset, offering valuable insights and lessons learned.
Long term expectation
“This comprehensive information is expected to directly contribute to the formulation and implementation of a highly effective long term operation, transforming the future universal credit application process in line with ever increasing customer expectations whilst reducing DWP’s operational costs.
“Furthermore, it will set the groundwork for subsequent iterations and improvements, particularly in the area of fraud prevention.”
Open banking services allow for read-only financial data to be shared between banks and third party service providers, which can be used to provide alternative payment methods and assist with wider financial capabilities.
While they so far made limited progress within public services, Ecospend has previously been awarded contracts with HM Revenue and Customs and National Savings and Investments, according to reports from Open Banking Expo.
There was also a significant move to promote its adoption late last year when the Crown Commercial Service launched a procurement framework for relevant solutions. The agency said the approach could reduce payment costs by up to 80% and cut down on fraud and error in payments.
