Open banking customers passes one million milestone


THE number of people using open banking has doubled to over one million over the last six months according to data from the Open Banking Implementation Entity (Obie).


Open Banking allows consumers and small businesses to connect their bank accounts with authorised third parties. It relies on legislation that requires the UK’s nine largest banks to share data with third party services where permission is given by a customer.


A statement by Obie said: “The doubling in customer numbers mirrors similar growth in third party service providers. Currently there are 204 regulated providers, up from 100­ at­ the­ end­ of­ 2018,­ who­ are­ fielding­ approximately 200 million monthly calls on bank account data.”


Imran Gulamhuseinwala, an Obie trustee


said: “Open Banking is about giving cus- tomers access to their data to rebalance the market in their favour. By creating greater competition, we are seeing inno-


vation from new entrants and incumbents, which is leading to greater convenience and crucially greater engagement. We believe 2020 will be the year when adoption of Open Banking­­financial­services­really­takes­off.” Last year the Financial Conduct Authority set up an advisory committee to explore the potential of expanding open banking into a wider­open­ finance­strategy.­The­FCA­said:­ “It­ could,­ for­ example,­ improve­ the­ finan- cial health of consumers and businesses by enabling them to see all of their accounts from different­ ­suppliers­ in­ one­ place­ and­ helping­ them to manage savings, loans, investments and pensions. It could facilitate switching products or transferring funds between prod- ucts to maximise the interest received, possibly doing so automatically. It could also facilitate access­to­financial­advice­and­credit.” Christopher Woolard, Executive Director of Strategy and Competition, Financial Conduct Authority (FCA): “The UK has led the way internationally in the development of open banking, which supports our objective of pro- moting­effective­competition­in­the­interests­of­


consumers. We welcome the growth in take up of Open Banking and support its continuing development.


In a recent blog post the ICO said: “Whilst the idea of mass data sharing is usually enough to send a shiver down any data protection practitioner’s spine, the rollout of Open Bank- ing­demonstrates­the­clear­benefits­it­can­bring­ both to consumers and organisations, while still complying with data protection law.” It said: “If you’ve ever used an app which scrapes money into a savings ‘pot’, or, a price comparison website, you’ll already have an idea of the concept. The technology which sits behind all of these services – Applica- tion Programming Interfaces (APIs) – has the potential to provide a level of security and individual control that other sectors are now seeking to harness. This data shar- ing­ in­ the­ financial­ sector­ has­ created­ a­ culture of organisations working together to create competition and not just be in competition.­ Everybody­ benefits­ –­ con- sumers,­ developers,­and­ the­ wider­ finan- cial sector.”


January-February 2020


INFORMATION PROFESSIONAL 9


News pp8-9.indd 3


23/01/2020 14:33


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