Could the lessons from the challenger bank revolution boost innovation on the climate crisis? – TechCrunch

Now that the the world is swimming in data that we may be able to deal with climate and environmental risks for the planet. But while there is a lot of capital to invest in things like ClimateTech, much of the data needed to tackle this big problem is misapplied, which leads to misallocation of resources. So to deal with the climate, we need to get the right data. Much of the solution lies in open standards and interoperability.

The story of how the Open banking standard developed could show a way forward. Its development outside the UK has led to industry-wide regulated interoperability (spanning a wide range of areas, including intellectual property, legislation, liability and licensing, and technology to enable sharing of data). This means that more than 300 financial technology companies are now using the standard, which has helped catalyze similar initiatives.

Open Banking has led to the explosion of tech startups that we see today. Revolut, Monzo, Starling, none of them would have existed without Open Banking.

What if someone created something like Open Banking Standard, but this time to stimulate climate-friendly innovation around financial products. After all, we are more likely to save the planet if we encourage companies with financial models to make it work.

Well, it turns out that one of the key players who developed the Open Banking Standard plans to do the same for climate data in order to allow the insurance industry to find solutions to the climate crisis.

Gavin Starks co-chaired the development of the Open Banking Standard, laying the groundwork for regulation and catalyzing international innovation.

But Starks has taken shape in this area. Before co-creating Open Banking, he was Open data institutes Founding CEO, in collaboration with Sir Tim Berners-Lee. ODI may not be well known in Silicon Valley, but its franchises have been launched in 20 countries and have trained 10,000 people.

Starks' previous company was a pioneer in the climate field: AMEE (engine of avoidance of mass extinctions) organized environmental data and standards of the world in an open web service, generating $ 10 million and sold in 2015 PredictX.

Starks also chaired the development of the first Carbon compensation Gold Standard.

But what Starks has set for itself is a different task than Open Banking.

His new project is Icebreaker One, a new non-profit organization that raised an investment of more than 1 million euros last month, largely funded by the British government-backed organization UK research and innovation. It is also supported by a consortium of financial and regulatory institutions.

So what's the big idea this time?

The idea is to develop an open standard for data sharing that will stimulate innovation in climate-friendly financial products and deliver new products.

Like the Open Banking Standard, Icebreaker One will lead the development of the SERI standard. This is the standard for the environment, risks and Insurance (SERI) which was created to design, test and develop financial products with Icebreaker One members before COP26 conference in Glasgow Later this year.

SERI could provide a framework for an open and addressable market, built around the needs of the market and the new reality of climate change. If it works, it would allow insurers to share data in a robust, legal and secure manner, spurring the use and adoption of artificial intelligence tools in the industry. ;insurance.

It would mean insurers ability to invest in low-carbon financial products and services, based on real and real data.

SERI's current launch partners are Aon, Arup, Agvesto, Bird & Bird, Brit Insurance, Dais LLP, Lloyds Register Group and the University of Cambridge.

The idea behind the initiative is that, as large catastrophic weather events occur with higher frequency, the UK insurance market is under pressure to evolve.

By creating the data platform, insurers can invest in, rather than ignore, low-carbon financial products because they cannot be priced correctly.

Starks says: The time for theory is over, we need quick and meaningful action. The threat of climate change to the global economy is tangible and the increase in catastrophic climate events is capable of bankrupting markets and even nation states. We are already seeing that insurance in certain areas is becoming untenable, which poses a real threat to communities and society as a whole.

He adds: We work with some of the most influential organizations in the world to plan policies and regulations to protect citizens, our environment and our economy; unleash the power of unused and underutilized data to enable governments and businesses to respond effectively, responsibly and sustainably to the threats posed by the climate emergency.

Arup, the multinational professional services firm best known for its major engineering projects, is one of those in the SERI consortium.

Volker Buscher, data manager at Arup, said: Responding to climate change and market sustainability is vital and working with Gavin and industry figures is a great opportunity to make real data more difficult, to evolve investment strategies, to highlight inefficiencies and better understand risks. It is good for everyone that we create the work plan for freer sharing and licensing of scale data that can be a boost for climate-affected financial products and services.

Icebreaker One plans to overcome the inherited and locked-in culture of the insurance industry.

The task before us is great. Currently, the precious data needed to unlock this potential is in recently closed data lakes. The goal is to leverage $ 3.6 trillion in investment.

If the insurance industry can innovate around climate change and the new types of risks it creates, then the financial world can create the type of boom that Open Banking has made.

And that would mean not only new insurance products but also new startups in what has been described as InsureTech.

But the biggest prize, of course, is the planet itself.