Barclays begins preparations for Open Banking

With just a month to go until the arrival of Open Banking in the UK, Barclays has moved to take advantage with the publication of a primer for consumers on what the new rules mean.

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Barclays begins preparations for Open Banking

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

With multiple consumer surveys indicating that Brits have limited awareness of the new data sharing regime, Barclays is among the first of the UK's big banks seeking to publicly educate its customers on the issue.

The one-page document posted on the Barclays' Website complements the mail out of a refreshed set of T&C's advising customers of the changes, which have been mandated by the Competition and Markets Authority in a bid to boost innovation and competition in the retail banking market.

States the bank: "Barclays will launch its Open Banking solution in 2018, allowing you to not only share data with other providers but importantly, to view your accounts from other providers conveniently and securely through your Barclays Mobile Banking app."

Reminding customers that they are not obliged to share their data, the bank warns against the use of screen-scraping tools which require customer IDs and log-ins and instead points to its own APIs as a safer means of engagement.

Barclays online API catalogue currently offers basic data services for branch and ATM location and product information, but the bank has tipped its hat with a "Coming Soon, Open Banking APIs" pledge and instructions for registration and authorisation of Account Information Service Providers and Payment Initiation Service Providers.

While Barclays remains tight-lipped about its plans, fellow high street giant HSBC has been more vocal, roping in 10,000 customers to test an Open Banking platform for aggregating account data from other banks and partnering with Bud to introduce money management tools to take advantage of the free-flow of data between accounts.

The Open Banking Implementation Entity charged with overseeing the roll out yesterday confirmed that the first current accounts to open up under the scheme will begin on 13 January with all providers onboard by March 2018.

For the first six weeks, the institutions offering Open Banking services will be asked to limit the number of instructions processed and only make it available to a small group of selected customers.

This enables authorised third parties to be sure that their products and services are working as intended and for banks and building societies to be certain that they can manage volumes appropriately, says Ian Major, operations director at Runpath and third party representative at the OBIE.

"Members welcome the 'managed start' approach and will concentrate in the formative weeks on supporting the phased and controlled release of the various banks’ APIs," he says. "Adopting this method will ensure that the UK establishes a robust system for the rest of the world to learn from.”

Barclays is one a five banks listed by the CMA as lagging behind the stipulated 13 January deadline. It has notified the watchdog of an amended launch date for February 2018. Other banks behind the curve include HSBC, Bank of Ireland, RBS and Santander.

While the initial launch of Open Banking in the UK covers personal and small business accounts - as mandated by the competition wathdog in 2016 - the Chancellor of the Exchequer’s November Budget announced that the CMA9 banks behind the roll out have committed to extending the standards to cover all products with payments capability such as credit cards and e-wallets throughout the course of 2018 and 2019, in alignment with Europe's adoption of PSD2.

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Comments: (7)

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

At the end of Innovative Fintechs Don’t Need No PSD2 Regulation,  I'd wondered how fintechs would react if Open Banking requires them to share their customers' info with banks.   

The way Barclays is openly encouraging its customers to view their accounts with other providers via Barclays Mobile Banking app, it looks like my idle conjecture has now become a clear and present danger.

A Finextra member 

A great move by Barclays. Their unique approach provides open but safe banking. Unlike NatWest approach who offer open banking but no useful or informative awareness programs; just changes to T’s and C’s pointing out that if customers share login details with TPP’s they and only they will carry risk of fraudulent losses

James Piggot

James Piggot Product Analyst at Finastra

What I would like as a customer is a view of my net financial position. That includes my current account, savings account, mortgage, credit card, the current value of my property, the value of my portfolio of shares and/or pension savings.

My assets and liabilities in other words, same as you would do for a corporate, treat personal customers as an enterprise, use analytics to provide trends to give me my position in the future, provide guidance such the benefits of paying off your mortgage early, automated sweeping of balances, etc.

(But take care to be optimistic, there is no point telling a millenial if you continue on this course you face penury when you retire even if its true as that may not change their financial behaviour rather it will make them spend more on drink to drown their sorrows)

The closest I have to having all my finances in one place is the Moven here in the UK. I can see my current and savings accounts and credit card balance across different banks, and this is presumably what Barclays and HSBC and other banks will seek to emulate? 

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

On Open Banking: Consent is Key, I'd raised the subject of MINT-like PFMs who have been merrily using login credentials for 10+ years. In response, an anonymous Finextra Member had pointed out that it's illegal for a TPP to perform screen scraping under PSD2. In that case, why should NatWest amend its T&Cs to warn customers that they're liable for fraud losses if they share their login details with TPPs? Shouldn't such TPPs be illegal under PSD2 in the first place??

Sreeram Yegappan

Sreeram Yegappan Director at Cognizant

@James Piggot, there are options in the UK like Moneydashboard and yodel but all of them use screen scraping which is open to security risk and questions on data integrity..

James Piggot

James Piggot Product Analyst at Finastra

@Sreeram yes I did use Yodel in the past but it became too much effort to keep all the usernames and passwords correct and up to date, there was too much friction in use so let it lapse after a while.

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

@JamesPiggot: Good point. By "up to date", are you saying that your individual finserv websites ask you to change your password every N days or so? (In India, by RBI mandate, N = 90 days). If so, I see the same friction hitting all the PSD2-triggered PFMs as well. Going by my experience with using aggregator platforms like HootSuite, I can bet that these PFMs will also use the same creds as your online banking creds even if it's only to access APIs. Another set of creds for API access is too much friction and will be a non-starter.

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