If banking were more Open Source, we would need less Wikileaks

Banks are important. The world economic crisis is due for a good part to insufficient transparency in banks. Wikileaks next document drop may target banks. And a small group of activists is trying to solve those bank problems in a (Open Source) way that may make Wikileaks less necessary.

I already wrote about real openness at the last Open World Forum, but during that conference I also met Simon Redfern of the Open Bank Project (OBP). We only had a few minutes, so Simon could give me only an extra-short explanation, but it was enough to let me eager to know more.

The Open Bank Project develops Open Source Software called the OBP API (Application Programming Interface). In general, an API is a piece of software and/or a set of rules that many independent programmers can embed into their own software programs to make them talk to each other. “Open Source” means that the software is freely usable, auditable and reusable by everybody, so it can’t play tricks. The OBP API “exposes banking transactions to larger audiences and to software applications”. In normal human language, this means something incredibly powerful: the holder of a bank account managed with OBP-compatible software will be able (if he or she decides so, of course) to let everybody, or just some selected individuals, see some transactions on that bank account automatically, in real time from the Internet.

Yes, you read that right. OBP is a technology that will allow voters to say to their candidates “since you put transparency in your program, if you want my vote, please set up your account so I always know by email how much money you get and from who”. Interesting, isn’t it?

I asked Simon to explain how OBP was born. This is his answer:

Simon Redfern: About 5 years ago I started hearing and thinking (more) about corruption. I can’t remember exactly what made me conceive of it – and it wasn’t a formal process – but at some point I suddenly had the idea of a new type of bank where all the accounts were open for the public to see. This was the original idea and since then it has matured.

At first I thought I should keep the idea secret and think up some kind of business plan to take advantage of the concept so I didn’t talk to many people about it. However, the people I did speak to responded energetically – and a good friend of mine from the UK suggested a “protocol” so that the idea could be applied to other banks too.

Then in 2008, while working in Athens, I noticed lots of construction sites with European Union (EU) boards proclaiming “Funded by the EU”. When I mentioned this enthusiastically to somebody she said: “Yes but Simon, there’s so much corruption here!”. So, this got me thinking more about realising the project – and then of course, two years later, Greece collapsed.

By 2010, I had also come to know APIs better. My company TESOBE had built them for our internal projects musicpictures.com and eviscape.com; besides, it was easy for me to see that if Web services such as Flickr and Twitter have grown so well it is also because of APIs. The reasons is that APIs massively extend the IT team of a company, because they let external developers use the companies data and services to build innovative applications creatively and independently.

At the same time, I have been understanding more about the silent revolution that is “Open Source” and I realised that the issues concerned (public money, corruption etc) are too important and require too wide an adoption to not involve the Open Source community.

Corruption was the catalyst for the project – but the Open Bank Project is definitely also about better, simpler, cooler banking, business and financial apps and a more open philosophy towards software development and business too.

Marco: I wish all success to Simon and OBP! Personally, I am not sure if society at large is mentally ready for opening all bank accounts everywhere. But it sure would be nice if adoption of OBP-compliant accounts became mandatory for all Public Administrations, their suppliers and for all political parties.

11 thoughts on “If banking were more Open Source, we would need less Wikileaks”

  1. Wow!!
    you people are doing good job by bringing openness in all fields. Banking is must field to fight corruption.

    I only wish something like that can be introduced in my country(india), as it is one of the ultra corrupted. But based on previous incidents, i am sure it will not happen. For example there was a plan to introduce a law for swiss banks to reveal account details of indians, if CBI(india’s investigation unit) requires it. But this plan was unanimously rejected in parlament of india. In this type of ambiance, will you be able to achieve acceptance to OBP? I don’t know the situation in other countries, i hope it is better atleast there.

  2. This is certainly and interesting turn in the use of financial information. Even I couldn’t have foreseen banking data shared much alike facebook and myspace. I have always believed that its the people not the tools at fault when it comes to our myriad problems. Systems, methods and legislation are inadequate because they are the selection of tools that we use. I am glad for the breath of fresh air that we can actually be better by being more open than battening everything down to the point that everyday information is reduced to secrecy. Power to all.

  3. Just a great idea, but today a bank is the most bigger icon of corruption. It’s a shame, but behind the money, always goin to exist corruption.

    But, the original idea tha you show here is absolutely amazing.

    Nice job! 😀

  4. There is a massive contradiction in idea of applying this to officials. Openness cannot be forced on anyone, least of all politicians, who will just respond like hackers and workaround the requirements. Which will be possible as long as our money is interest-bearing.

    Likewise, as open source, interest-free currency spreads in the form of web-based credit clearing systems (see work of Thomas Greco), the monopoly on supply of the kind of money that causes corruption will no longer be enforceable, either.

    No political organization necessary. Just the writing of code and an organization to use it.

    1. “Openness cannot be forced on anyone”

      In general, I do agree. Not so with politicians. If they want my vote, why shouldn’t they be open on certain issues? The openness possible with Open Bank is not an all or nothing proposition. When it comes to working around requirements, people will always do that, with whatever system. Some systems just leave more space for this than others, and Open Bank seems to me better than what we have today. But if “they will work around requirements” enough to stop change by itself, we’d better run off a cliff.

      With respect to interest-free currency, Greco etc: I have a basic knowledge of what you are talking about. Even if I wanted it (I have no definite opinion yet), asking for Open Bank doesn’t mean giving up the quest for more radical changes. People who don’t compromise often don’t accomplish any improvement in the end. There are cases where any compromise is wrong, by principle. I don’t think this is one of them.

  5. Thx all for your nice comments, I’m working with Simon on the Open Bank Project and I’m always happy and impressed by the feedback we have from the community. Just to give a quick update, Open Bank Project is still running, we manage to have some code done right now, we have our first prototype, we’ve approached some big banks here and there in Europe(surprisingly, they weren’t as uninterested as expected :)), next step is to have as many organisations as possible to support us and say they would adopt Open Bank Project and share their financial data. Our strategy is to create a kind of social pressure toward the adoption of Open Bank just as marco was saying politician won’t get my vote until they adopt Open Bank and they demonstrate more transparency!

    If interested in OBP drop me a line, my email is ismail (at) TESOBE (dot) com.
    I’d be happy to keep you posted about our wonderful adventure :)

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