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Open Banking is coming soon, and Banks are beginning to offer your clients free software to enable them to input their financial data into the software. This will allow the Banks to read the transaction history of Personal and Business Current Accounts and initiate payments from those accounts.Why the Competition and Markets Authority (CMA) is making this happen. Open banking will mean reliable, personalised financial advice, tailored to your clients’ particular circumstances delivered securely and confidentially.
To provide tailored advice banks and other financial service providers need to know how your clients use their account. At the moment, to get personalised advice, you have to hand over your confidential banking information to price comparison websites.
Open banking will use APIs (Application Programming Interfaces) to share customer information securely. This tried and trusted technology is used by many well-known online brands, such as Uber providing information about the location of a taxi.
Third party providers will be able to use open banking APIs to see your clients’ transaction information to tell them what they might save when considering the current account best suited to them. Or for small business owners they could find the best deals for their business accounts and loans.
At present, Open Banking technology enables organisations to easily compare Personal Current Account, Business Current Account, Business Loan and Commercial Credit Card products from banks operating in the UK. It also makes it simple for organisations to access detailed information – such as locations and opening times – on bank branches and ATMs.
It does this by maintaining Application Programming Interfaces (APIs) and standardised data structures that govern how banks make information about their products, services, branches and ATMs available.
In January 2018, Open Banking, working with UK banks and regulators, will release APIs and standards that enable organisations to – with the customer’s permission – read the transaction history of Personal and Business Current Accounts and initiate payments from those accounts.