Open Banking: What’s it all about?
1. What is Open Banking?
Due to new EU standards, Open Banking is coming into force for UK banks on 14 September 2019.
This means all UK-regulated banks have to let you share your financial data such as your spending habits, regular payments and companies you use (basically your bank, credit card or savings statements) with authorised providers offering budgeting apps, or other banks – as long as you give your permission.
For example, you will be able to connect your bank account to Xero, so that your bank transactions can be pushed into Xero, to make your bank reconciliations and record-keeping super easy.
Or you could connect your bank account to an app that would analyse your spending and recommend a new product like a credit card or savings account to save you money.
2. Why the changes?
These changes are happening because they’ll bring more competition and innovation to financial services which is hoped will lead to more and even better products to help manage your money.
The changes are a direct result of the Competition and Markets Authority (CMA) forcing the nine largest UK current account providers (Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, RBS Group, Santander) to open up their data.
This means developers of mobile and web applications are able to ‘plug in’ to your current account data in a secure and standardised way, if you give them permission to do so.
3. Which banks are affected?
You’ll be able to share your data for any ‘payment account’ you hold. This includes current accounts, credit cards, prepaid cards and some savings.
The rules only apply to accounts which can be accessed online, and you’ll need to connect your online banking with the third party so it can get your data.
4. Where can I get more info
There is loads of info out there, but we recommend sticking to reliable sources such as:
Xero: Open Banking FAQs
5. How does this affect my Xero bank feeds?
This may affect your Xero bank feeds, so we’ve written a whole other blog specifically dealing with Xero bank feeds and Open Banking.
Thanks for reading. Get in touch for more help with Open Banking or your Xero Bank Feeds.
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