This year, banking in the UK has undergone a radical shake up. In a bid to increase competition and encourage banking innovation, the UK’s nine biggest banks – HSBC, Barclays, RBS, Santander, Bank of Ireland, Allied Irish Bank, Danske, Lloyds and Nationwide – are now required to give customer’s the option of securely sharing their data with authorised third party companies.
The new directive, which came into force on the 13th January 2018, is the start in a series of Open Banking rules designed to help customers in the UK make the most of their bank accounts. Indeed, customers will now be able to open one banking app and see all their accounts, even those they hold with other banks. This will make it easier for customers to manage multiple accounts, compare deals and switch accounts altogether. They will also be able to “opt-in” to receive personalised offers on products such as broadband, overdrafts and mortgages.
Third parties wanting to provide services via Open Banking will need the authorisation of the Financial Conduct Authority (FCA) to do so. Approved third parties – such as challenger banks, fintech companies and utility suppliers – will then be able to access customer’s spending archives, with their permission. Imran Gulamhuseinwala, head of Open Banking Limited, the non-profit organization coordinating the system, predicted these rules would lead to a range of new products that encompass “new ways of managing money, of making life-changing financial decisions, of paying for things.”
Indeed, according to the Centre for Economics and Business Research, the introduction of Open Banking could contribute over £1 billion to the UK economy and support as many as 17,000 new jobs. Since the rules came into force, a number of fintech apps have already been launched that login to a user’s bank account via Open Banking to help them make the most of their finances. The Nebula Labs team of creators and innovators are here to help you turn your fintech idea into reality – there’s truly never been a better time to start a finetech app!