The following article is a guide to Open Banking and how it is used by third parties. It will also outline how Avar are planning to apply this in future to ensure high quality service levels to benefit their clients.
What is Open Banking?
Open Banking are a series of reforms, brought in by the Competitions and Markets Authority (CMA), relating to how banks deal with your financial information.
From 13 January 2018, Open Banking is governed by the Second Payment Services Directive (PSD2) which requires banks to open their payments infrastructure and customer data assets to third parties that can then develop payments and information services to their customers.
Essentially, Open Banking is the practice of sharing financial information electronically, securely, and only under conditions that customers approve of.
How will it Affect Me?
If you have given your bank permission, all UK regulated Banks must allow you to share your financial data with authorised third parties,
Third party providers will be able to analyse your spending habits, which payments you make regularly to companies and categorise the type of purchases you are making. These are all designed to help you manage your finances and track your spending,
You may already be using services that are utilising Open Banking.
Will my Data be Safe with Open Banking?
Open Banking is founded on the principle of sharing data providers should all be using stringent security measures with encryption to ensure your data remains secure.
You are always in charge and no payments can be made from your accounts unless you authorise them.
Further, to use Open Banking, providers must comply with strict Financial Conduct Authority (FCA) rules.
If you want to check whether the provider is regulated, you can check on the Open Banking Register.
Your bank or building society will pay your money back if fraudulent payments are made. You’re also protected by data protection laws and the Financial Ombudsman Service
How are Avar Using Open Banking?
We are working closely with third party providers to deliver an effective Open Banking solution to our clients.
We will, with your authorisation, be able to download Bank Transactions and balances to use when completing your accounts or tax returns.
We will never again need to send requests for bank statements once we have connected your account.
The above system will save time and costs for both Avar and our clients, allowing us to focus more on you and your business rather than chasing you for information which is neither productive nor profit generating.
This will be a read-only service and we will only have access to your banking transactions. We cannot make or authorise payments using this service.
