What you need to know about Open Banking
What is meant by open banking?
In short, Open Banking is a secure way to provide financial institutions access to your financial information. Allowing organisations to view things such as your incomings and transactions, meaning that it is easier for them to find new tools, products and services that are tailored towards what the customer needs.
Open banking was first introduced by the Competition and Markets Authority on behalf of the UK Government to ensure that more innovative and healthy competition was being added to the UK financial market for both businesses and individual consumers.
How does open banking work?
Open Banking requires financial organisations, such as banks and building societies to provide viewing access to customer data for third-party providers. However, it is worth mentioning that you are not obliged to provide data if you do not wish to. Third-party providers can then offer tailor-made recommendations for products for which your spending habits are suitable.
What does open banking mean for customers?
Ultimately, it means that customers can find suitable financial products in line with their spending habits and specific needs without requiring the need for a hard search enquiry, which can leave an entry on your credit report.
By providing access to your financial information, including your account information and savings accounts, both individuals and small businesses can securely share their proven ability to afford and be eligible for specific products. Which can be particularly useful if they have a thin file or poor credit history.
What are the benefits of open banking?
There are many benefits of using this type of technology, some of which include:
- Accuracy: Open banking allows for much more accurate information of things such as interest and APR, in comparison to price comparison sites.
- No need for credit checks: Intrusive hard search enquiries can deter many customers from getting the financial products and help they need. However, with open banking APIs, there is no need for credit checks.
- Opt-out when you want to: If you no longer wish for any banks and third parties to view your financial information, you can opt-out either by not renewing your subscription or turning off permissions with your bank.
- Regulated: Open banking is governed by the Financial Conduct Authority (FCA), always check that the third party is FCA regulated before you agree to share your data with them.
Is open banking secure?
Open Banking APIs are extremely secure ways to transfer and provide viewing access to your data. As well as this, banks also offer their security as added safety when allowing third parties to view your data. As you are in control of your online banking, you are the only person who can authorise a third party to view your data.
As well as this, unlike screen scraping, open banking access only provides viewing access to your data, not the ability to access and change any information or settings in your online banking portal or app.
Can I opt-out of open banking?
Yes, you can opt-out at any time if you do not wish to share your data any longer. You can either change your access settings within your app to withdraw consent for the third party to view your data. Or you can contact your bank, either online, via your online banking app or via telephone to withdraw consent.
Is open banking free?
Yes, the service is free to use when you sign up with any third party. However, be aware that some apps or websites that use open banking may charge you for using their products and services. Always check the terms and conditions before you agree to sign up.
Is it safe to link bank accounts?
Linking your account using an API is generally safe, as long as you ensure that you are only sharing your data with banks and third parties who are regulated by the Financial Conduct Authority. Securing yourself against data breaches and unapproved uses of your data in the future.
How does Fablious use open banking?
Fablious uses open banking to view your financial information, including your credit and debit transactions, to match you with the best finance offerings available that are best suited towards your financial situation in addition to your financial requirements.
To get the most out of Fablious and feel Fablious about your finances, sign up for online banking with us today, get your login details and we’ll match you with the best deals on alternative finance for whatever you need!
Frequently Asked Questions FAQs
Does open banking include credit cards?
Does open banking include credit cards?
Can my bank share my information?
No, since open banking requires banks to get consent before a customer can use open banking, your bank cannot share your financial information without you consenting and giving your permission first.
Is open banking regulated?
Yes, open banking is regulated by the financial conduct authority (FCA), meaning that every third party who offers open banking as a service, should be regulated either by the FCA or the European equivalent.
Why choose Fablious?
We have all manner of different alternative finance options available for every customer who signs up.
At Fablious, we’re wholly committed to ensuring that our customers have complete understanding and transparency when it comes to the products and services we help find.
If you wish to find out more information about any of our services including:
Alternatively, you can also browse the offers available to you on our Solutions page or sign up with us today to ensure that you feel Fablious about finance.