Sharing your banking information allows you to take advantage of a number of different services. These services can allow you to see all your bank accounts in one mobile app or online, analyse your spending and even allow you to make payments directly from your bank account. In this guide, we look at why you would share your information, what the benefits are and how to do it safely.
What is Open Banking?
Open Banking is a term used to describe a set of technologies and standards, which in the future will allow consumers to safely and securely share their account information.
For example, you can choose to give a regulated app or website secure access to your current account information.
You can choose which apps and websites you want to use, what information they can access and for how long. No one gets access unless you say so.
To use Open Banking you need online or mobile banking for your personal or business current account.
Services allowing you to share your account information with a company other than your bank have existed for a while, but have been provided through a system called screen scraping. Screen scraping involves capturing on-screen information, like taking a photograph of your data.
Open Banking is more secure than screen scraping because, for example, you don’t have to share your password or login details with anyone other than your bank or building society.
Why should I share my information?
Normally, you should not share your bank log in details. New rules are designed to make sure company’s keep your account information safe, but you should still be careful who you are sharing your details with.
Sharing your information allows companies to offer you a wide range of services. However, you can choose how your information is used and who it’s shared with.
You might see these services being provided by companies you recognise, such as high street banks, or by other companies. Services available might include:
Account dashboard and aggregation - you can see accounts from multiple banks and building societies in one mobile app or online.
Spending analysis – categorise transactions and payments across multiple accounts so you can see exactly how much you’re spending on certain things or with specific retailers.
Shopping around for services – for example, if you’re looking for a new energy provider on a comparison site, your spending habits will be automatically analysed and you’ll be able to find the best offers, without having to manually enter all your information.
Track financial goals – if, for example, you’re saving up for something, you can create a goal and monitor your progress.
Spending limits – see how much you’re spending over a period of time, once regular payments, such as rent and bills, are taken into account.
How can I check a service is not a scam?
When you sign up with a company for account information services, the provider should give you enough information to understand the nature of the service being provided and how it will use your data, including whether it will share your data with anyone else.
Before you use one of these services be alert, and make sure you are confident that any organisations you share your information with are who they say they are. You should make sure that you understand the service and that you are happy with who will be providing it to you.
If you don’t understand why you’re giving access, or who information will be shared with, you shouldn’t give permission. If you do not give permission, you will not be able to take advantages of the services being offered.
What information will they be able to see?
Companies should only ask for permission to access the information they need to provide the service they’re offering.
You can choose to give access to current accounts, flexible savings accounts, e-money accounts and credit cards.
Types of information you can share include:
- Account details including balance and name on the account
- Regular payment details, such as who you’re paying, standing orders and direct debits
- Transactions like incoming and outgoing payments from your bank or building society account
- Account features and benefits, such as fees, overdraft payments and rewards
You can also give them permission to make one-off payments from your bank account. You might also choose to share your card details for recurring payments.
How will sharing my account information work?
To take advantage of account information services:
- You will usually need to have an app downloaded onto your smartphone, or login to the website.
- You will be asked to add the details of different bank accounts, so the company can bring all the information together.
Businesses who wish to access your information will have to give you enough information to understand how and why your data will be used.
If you choose to given them access to your bank account information, you will either be :
- Directed to your banking app or online portal to login and confirm you wish to share this information.
- Or they may send your bank details securely through their own portal.
Your bank will then give the company access your data.
If you choose to use this service, some online retailers may allow you to make payments without using a card. You will recognise this when you get to the checkout and you’re directed to your bank’s website to login and give the retailer permission to request the payment from your bank.
This might also involve additional security checks, such as two-factor authorisation (2FA) to prove it is you making the purchase.
The most common form of 2FA is a one-off code, sent by text message, to the phone number registered to the account. However, it could also involve a security question, or a fingerprint scan.
How to give permission safely
To make sure you stay safe when using these services, there are a few things you need to do.
- Check the company you’re using, or thinking about using, are on the FCA register.
- Check your statements and if you notice any unusual activity or payments from your account, contact your bank or account provider straight away.
- Make sure you know how to cancel authorisation. You should be able to find this information on the company’s website, or by calling them.
What to do if something goes wrong
If a payment fails to go through, your first call should be to your bank, rather than the retailer.
If you notice a payment out of your account which you did not authorise, the first thing you should do is contact you bank or building society as soon as possible. If you did not authorise it, you can claim a refund. If you’re not happy with their response, you can complain to the Financial Ombudsman Service within six months.
You also have the right to complain directly to a company and they must respond within 15 days, unless there are exceptional circumstances.
If your data has been used for something you didn’t agree to, contact the organisation involved. They are required to explain how and why they are processing your information, if you make a formal complaint. Again, if you’re not happy you can make a complaint to the Financial Services Ombudsman.
If you think you’ve been the victim of a scam, report it to Action Fraud on 0300 123 2040 or use their online reporting tool. You should also report it on the Financial Conduct Authority website using their reporting form.
For more about these services go to the FCAopens in new window