Open banking: UK banks could pay to access central hub of Brits’ financial data
British banks would pay for access to a central open banking resource under proposed next steps to introduce the concept in the UK, an industry body said today.
Open banking functions to let people share their spending habits, regular payments and payees with other banks would move into a separate service company, under next steps proposed by industry body UK Finance.
Banks would then pay “fair[ly] and equitably” for their use of this centralised data.
The Competition and Markets Authority (CMA) first proposed the introduction of open banking under the EU’s Payment Services Directive’ (PSD2), which came into force in 2018.
And the UK’s nine largest banks have invested £1.5bn since 2016 in open banking.
The concept is set to provide a secure way for people to share their financial data across multiple providers, allowing those with multiple banks to consolidate their account information.
People could also more easily compare banks’ services, the CMA hopes.
With the CMA’s open banking roadmap set to end in 2021, UK Finance today suggested its functions move into a “service company” paid for by banks.
“The goal of the next phase is to maintain what has been achieved and extend further in the future,” UK Finance said.
Eric Leenders, UK Finance managing director of personal finance, said: “Open banking is a significant technological and regulatory initiative which has huge potential for the future.
“It is vital that the open banking service community works together to ensure that the transition from the current roadmap to a more permanent plan is smooth, enabling the UK to maintain its world leading position.”
Accenture welcomed the call for banks to cooperate on funding a shared resource.
“Community collaboration is vital to ensuring this continues,” Tom Graham, managing director in Accenture’s UK banking practice, said. “This report lays out the next steps for building on the highly successful foundations the UK has built – maintaining the country’s technical lead, supporting business models built on this infrastructure, whilst considering what might come next.”