So, what is Open Banking exactly and how could it help increase customer choice?
Following its retail banking investigation, the Competition and Marketing Authority (CMA) concluded that older and larger banks do not have to compete hard enough for customers’ business.
To tackle a perceived lack of competition and innovation, the CMA is implementing a range of reforms, including Open Banking, with nine of the bigger banks are due to adopt these new rules by 13 January.
Open Banking allows customers to give consent to allow businesses, other than their bank, to access their current account information.
For instance, according to the Open Banking website this could include providing consent to a:
- Price comparison website to allow them to access your current account transaction history, enable them to analyse the data and suggest a better account.
- Money management app to enable it to access transaction history from several different current accounts and show how much you are spending.
- Online shopping to enable third party payments to be made.
The measures are designed to help increase competition and innovation in the banking sector. It’s all about increasing customer choice and it’s important to remember that you don’t have to share your data if you don’t want to, the decision is yours, you have to expressly give permission to the new provider.
We believe it is important for people to have access to a wide range of financial services tailored to their circumstances and requirements and will be keeping a close eye on how Open Banking helps customers and companies alike.
Find out more about our Personal Savings and Business Savings accounts.
Stuart Hulme
Director of Savings