Open Banking is the name used by the financial industry to talk about new services which let account holders share their financial information and give permission for banks and other authorised organisations to make payments from certain accounts.
Open Banking was introduced by the UK’s Competition and Markets Authority (CMA) to bring more competition and innovation to the financial services industry. It works using a secure system to let you register with other banks or authorised organisations (known as third party providers, or TPPs) and tell your bank to let them see and use your current account details.
It's up to you if you want to share your data. Open Banking gives the opportunity to share your information, but only if you expressly give your permission.
The Payment Service Directive (PSD) is European law, which is translated into UK law as the Payment Services Regulation. This law tells banks and other providers how they have to process payments and other services linked to providing payment services. The PSD was updated, and one of the changes introduced similar services to those contained in the UK’s Open Banking rules.
The PSD changes mean that TPPs can (with your express permission) see information about accounts and make payments on your behalf. This applies to any payment account you can use online (such as current accounts, credit cards and some savings accounts). Some TPPs may ask for your Internet Banking details so that they can see and use your account details, as they can’t yet use the methods introduced for Open Banking for certain accounts. The services offered by TPPs and the way they access information is developing. Soon the secure system developed for Open Banking will be used more widely.
Following a number of changes to the law and regulation you can now give certain permitted companies (third party providers or TPPs) access to some of your accounts, so they can provide services such as:
TPPs can only access your information and provide these types of services if you’re registered for Internet Banking and give your consent. If you share your Internet Banking details the TPP will be able to see information about other accounts you can see in Internet Banking.
Before you give consent for any third party provider (TPP) to access your accounts, it’s important that you understand the services they’re providing and how they’ll use your information, including if they’ll be sharing it with anyone. You should also take reasonable steps to ensure that the company is legitimate. See the ‘Be safe’ tab for more information.
To obtain your consent to access your accounts, TPPs can:
Before sharing your details with a TPP you should take reasonable steps to check the TPP is legitimate. In all cases, be vigilant and check the transactions on your account regularly. Once the TPP has your consent and has obtained access to your information, we can’t control how it will be used. See the ‘Be safe’ tab for more information.
Remember you can withdraw and manage your account information consents at any time.
For payment initiation services, how you give your consent depends on the kind of payment you're making:
Know your rights
Understand the consequences
Keep safe from fraud
Your rights when making payments in Europe
If you’re a TPP providing account information or payment initiation services and want to read more about how to use/access our APIs, you can find the technical specifications on our developer portal.
Cater Allen Open Banking APIs are live. You can find some additional information in the Open Banking update for Third Parties document.