You may have heard in the media recently about an initiative in the financial services industry called ‘Open Banking’ – but what is it?
Basically, it’s a change in the law – which came into effect from 13 January 2018 – designed to create more competition in the banking industry and give consumers wider access to the best products and services for them.
It does this through enabling customers to securely share their private/personal financial information with companies other than their own bank/building society.
Currently, financial data about how you spend your money, how often you are overdrawn and other details are held by your bank.
Under Open Banking, ‘ownership’ of this information transfers to customers, who can then choose to give regulated companies permission to securely access their accounts and analyse the information there.
The idea is that, using that data, companies can then guide consumers to better deals and the best, most cost-effective and appropriate personal financial products.
The Open Banking initiative has been led by the UK’s Competition and Markets Authority (CMA).
From 13 January, nine of the UK’s largest banks/building societies* (Barclays, Lloyds, Santander, RBS, HSBC, Danske, Bank of Ireland, Nationwide and Allied Irish Bank), to make certain information accessible to other approved providers in a standardised, straightforward and secure way.
Safeguards have been built into the system; all third-party companies which use Open Banking will have to be regulated by the Financial Conduct Authority (FCA) and be registered with them on a directory.
Please note that Open Banking does NOT affect/apply to Leek United or its customers.
* Only Lloyds, Danske and Allied Irish Bank will be ready for 13 January deadline, the remaining banks have been given extension to enable them to comply with the new requirements.Back to news