From January 2018 Open Banking will enable consumers to share banking data with trusted Third Parties. The new standard will create new opportunites to measure risk and affordability for the credit industry.
In September 2015, the Open Banking Working Group (OBWG) was set up at the request of HM Treasury. Its aim? To explore how data could be used to help people to transact, save, borrow, lend and invest their money. In February 2016, following their retail banking market investigation, the Competition Markets Authority (CMA) established the Open Banking organisation with a remit to deliver the much needed “Application Programme Interfaces (APIs), security and messaging standards”.
Open Banking provides a set of Application Programme Interfaces (API) standards which the nine Banks mandated by the CMA (Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, RBS Group, Santander) must implement. These standards make it easy for customers of those banks to securely share their data with third parties.
The process of accessing data is customer led, following OAuth 2.0 and OpenID Connect (OIDC)1 protocols: