To give you some background...Open Banking is a term used to describe a set of technologies and standards which allow customers to securely share their financial data.
Security is key with Open Banking. Your bank’s login and password details are never requested. Only apps and websites regulated by the Financial Conduct Authority (FCA) can enrol in Open Banking, and the bank is financially responsible if any fraudulent transactions take place. In addition, data protection laws -such as GDPR - are also integrated within Open Banking.
The scope of Open Banking covers retail accounts: everything from your average Joe’s account all the way to SMEs.
What’s next for Open Banking in the UK?
Open Banking is already well established within the UK and is spreading globally.
The implementation in the UK was considered a success and paved a new way of doing business in Europe, North America, Australia, New Zealand, Singapore, Japan, and South Africa to name just a few.
The initial scope was limited to account, transaction, reference data and the ability to initiate payments. Now Open Banking is looking at how many more accounts, how much more information, how many more areas could fall into its scope and allow customers to share a wider range of their financial data.
So, Open Banking and its revolutionary technology has paved the way to a new idea - Open Finance. This concept would go beyond Open Banking and its limitations which means taking the leap towards insurance, pension, mortgage and investment industries.
Open Finance will build on the concept of Open Banking by allowing access and to customers’ data concerning even more financial products and services. Open Finance can be thought of as the next step on the Open Banking journey.
