Gone are the days where you’re
expected to deep dive into piles of
sensitive financial data in preparation
for applying for business funding.
Thanks to Open Banking, you share
the minimum data required for the
product or service you want to access
through a secure, digital journey.
Open Banking transformed the way businesses and consumers access financial products for the better. It’s meant that organisations and individuals have been able to take control of their own financial data, to drive better outcomes all round. Legislation introduced in 2018 meant that we now have the choice to share our banking information with trusted third-parties to unlock the best financial services and products.
Almost a decade ago, the Competitions and Markets Authority (CMA) began a review of the UK retail banking industry at the time.
After a lengthy three year review, the CMA finally published a report mid 2016
that identified that the financial services industry was lagging behind in terms of both innovation and competition.
It discovered that smaller financial technology (Fintech) companies find it impossible to penetrate the banking market as the sector was unfairly dominated by incumbent banks.
As a result of the review, the CMA and Government ordered the 9 biggest banking players, aptly titled CMA9, to start rolling out Open Banking API’s that allow the safe sharing of data from one party to another,
The deadline outline for the complete rollout of the APIs was January 13th, 2018.
PSD2 is a directive from the European Union, which lays out the requirements for banks and businesses in the financial services sector to improve consumer protection, ensure that payments are safer and more secure, and to decrease the costs of payments services.
...Open Banking isn’t the new kid on the block anymore, as it was actually introduced almost 5 years ago! It’s strictly regulated and totally safe!
It’s secure, it’s fast and perhaps most importantly for businesses, it’s effortless. Already, more than 6 million businesses and consumers in the UK already use it, so the trial period is well and truly over!
Apps and services are regulated by the Financial Conduct Authority, which oversees UK financial services firms and markets. Regulations dictate that third parties must stringently protect your data once you provide access.
Open Banking was created with security at its heart.
Bank-level security – Open Banking uses rigorously tested software and security systems, so you can rest assured that your data is completely secure. In case you didn’t already know, you’ll never be asked to provide access to your bank login details, PINs or passwords to anyone other than your own bank or building society. If this ever happens, that’s a red flag, so stop immediately.
It’s regulated – Only apps and websites that are regulated by the FCA or a European National Competent Authority can enrol in the Open Banking Directory.
You have the power – You choose when, with whom, and for how long you provide access to your data, so no one can access it without your say so.
Extra protection – Your bank or building society should pay your money back if a payment is made which is unauthorised.
Also, you’re protected by strict data protection laws and the Financial Ombudsman Service.
Changed your mind?Don’t worry. It’s just as easy to withdraw your consent as it is to grant it. You can revoke access and opt out at any point!
There are two ways to stop providing access to your data:
You decide which apps and websites you want to use and share data with – Open Banking empowers you with your own financial data, so the choice is all yours!
You can use Open Banking for payment accounts that you access both online or on mobile, including your personal and business current accounts, credit cards and online e-money accounts.
The data you share with third parties includes:
Open Banking won’t cost you a penny as it’s completely free! Though of course, apps and websites will charge you for using their products and services.
AISP = Account Information Service Provider.
All this means is that the business has been granted permission to request consent from people and businesses to connect to their bank account and use their account information to provide a service or product.
This access is only ever read-only, meaning the TPP can’t move any money or make any transactions on the behalf of the consumer – they are simply able to look at the data.
Remember that your account information is never available as a default option. You have complete control over who can see the data stored within your account and you have to grant access, so you will never need to opt-out unless you’ve previously provided access.
