Six-month countdown to Open Banking phase two
Roger Vincent, head of banking and innovation at Equifax | 16:42 Tuesday 4th July 2017
In six months, phase two of the open banking scheme – which encourages financial service providers to offer high-quality, targeted services to boost competition – will begin.
Roger Vincent, head of banking and innovation at Equifax, outlines the changes.
“The banking industry is set for a huge customer-centric shake-up with the implementation of open banking phase two in January 2018.
“This exciting development will dramatically change the customer banking experience, helping consumers and businesses to use their financial transaction data to access products more easily and better understand their finances.
“The initiative kicked off earlier this year with stage one, where the ‘CMA9’ (nine banks mandated by the Competition and Markets Authority) provided improved access to information such as ATM locations and product listings.
“The second stage is the real game-changer, with bank transaction data made available digitally for consumers and businesses to share securely, and only with their agreed consent, via open application program interfaces (APIs).
“Through the open APIs the data can be used by authorised third parties to build new high-quality and targeted services, including new digital offerings, facilitating a more competitive environment.
“The ability for transaction data to be used for automated creditworthiness and affordability assessments, fraud detection and product accessibility is endless.
“Customers will be able to control how their financial data is shared digitally and provide a deeper picture of the way they manage their money.
“This could mean a quicker, more secure and fully digital mortgage application process or faster access to finance for a new business venture.
“For those currently underserved by the market, for example young people or the self-employed, it could mean the start of a journey to better financial health.
“Over the next six months, banks need to embrace the move towards a more transparent banking world.
“To do this successfully, preparations must focus on meeting the long-term practical benefits of consumer empowered data sharing rather than approaching this change as a tick-box compliance activity.”
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