What Does Open Banking Mean for You?

A new HSBC app that shows all of the different accounts held by an individual in one place is one of the first applications of the new open banking initiative. What is open banking and how does it affect you?

What is Open Banking?

Open banking is a new initiative that is designed to increase competition in the UK banking market. A a result, Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds, RBS, Santander and Nationwide now have to store customer data in a uniform way and allow approved third parties to access this data should they request to do so. This access has given impetus to privacy concerns in some quarters.

The new regulations are also expected to save consumers money according to the Competitions and Markets Authority (CMA).  A saving of £92 per year could be made by the average banking customer and £80 for the average small business according to the CMA.

Another reason for the Open Banking rules is that only 3% of individuals and 4% of businesses switch per year.

Which companies offer Open Banking services?

The four providers currently online are:

  • HSBC

  • Yolt - a subsidiary of ING

  • Credit Kudos

  • consents.online

What do they offer?

HSBC UK: ‘Connected Money’ app

The app allows you to see all of your bank products, no matter the provider, in one place for up to 21 banks.

ING Bank: Yolt app

All of the nine banks that have signed up to Open Banking can be compared, and consumers can view their own accounts, track their personal budget and see their subscriptions.

Credit Kudos website

The Credit Kudos app uses credit scores to assess the likelihood you will be able to access financial services. There are five lenders currently on the panel.

consents.online website and app

This app shows which third parties you have given access to your data.

How good is what's out there now?

The services currently on offer are still fairly embryonic due to the fact that Open Banking has only been in place since January 13.

Hamish Thomas of EY suggests that the growth in services will be exponential once the larger brands begin to participate more fully.

There could be big changes in banking in the next few years, but having a sound understanding of your current financial situation and putting a plan in place for your future will always be important. Contact Westminster Wealth Management today.