U.K. Gov’t Group Calls for Open Banking Standard
A U.K. government panel is calling for the development of an open banking standard that will enable banking data to be shared and used securely, giving consumers access to tailored financial solutions and an easier way to compare products and services. Convened last fall at the request of HM Treasury, the Open Banking Working Group (OBWG) is a collective of banking, open data and fintech professionals tasked with exploring how data can be used to help consumers transact, save, borrow, lend and invest their money. The OBWG this week issued a report calling for the development of an Open Banking Standard, which it said would improve efficiency and stimulate innovation in financial services.
The OBWG’s proposal calls for bank data, including information about products and services, to be made available as open data, so that services such as comparison tools can be developed. The group also recommends the creation of open APIs to facilitate the development of services that use bank and customer data, including transaction data that individuals or businesses can choose to share through “secure and controlled means.” Those measures will aid consumers by giving rise to new products and services designed to suit their individual needs, according to the group. For example, a consumer could give an approved comparison service permission to access his bank account data. The service could then access that information via open API and recommend an overdraft facility, helping that consumer save up to £140 (US$203) a year, the report said. Businesses also could benefit; many SMEs use commercial software that requires entering transaction data manually. The open standard would enable an SME to permit its accounting provider to access transaction data automatically, saving time and money.
The OBWG calls for rolling out the standard over the next five years, with the Open Banking Implementation Entity responsible for carrying out the directive moving forward. A “minimum viable product” for an open banking API should be launched by the end of this year, the OBWG said.