What happens now? Open Banking post PSD2
Open Banking came into effect on Saturday the 13th of January 2018, alongside the PSD2 Legislation, but this doesn’t mean that the way we bank has changed overnight.
With APIs set up between banks and FCA regulated third parties that provide Account Information Service (AIS) and Payment Information Service (PIS), customers can now share their information to use these third party applications without having to share their account security information. Providing an ‘Account Information Service’ is therefore now a regulated activity, providing much better security to customers. Customers can control exactly what they share and with whom without having to disclose any passwords or log in information. In addition to this, they can use these third party providers to make payments safely and securely, without the hassle of going through a bank first.
However, January 13th 2018 was only the start of Open Banking. Banks have now begun a managed roll out, or ‘beta’ period, which means they are only now starting to test their APIs with FCA regulated third parties. The public launch of Open Banking based services won’t be until mid-March to April and won’t be available to the public to take advantage of until then. In addition to this, Open Banking, at the moment, only affects the top 9 banks in the UK and Northern Ireland.
Currently, customers still have to input their security details into third party applications in order to make use of financial services. However, if customers share their details with regulated AIS or PIS providers, banks cannot hold customers responsible for unauthorised transactions just because customers have shared their credentials. This means, that despite APIs not being in effect as yet, customers can already safely and legally take control back of their data and use services that can help their finances. For more information please visit the FCA website here.
Survive or thrive?
The new PSD2 legislation: an opportunity to be a forerunner in the fast-changing financial market
PSD2, with a drop dead date of 13 January 2018, required all banks to ‘open up’ access to their payment facilities and account information. The new legislation allows consumers to share information the banks hold on them with any number of FCA approved third parties, typically financial institutions or enterprises offering new and exciting products and/or services. This means open banking will become the 'norm' and it’s important to be ready.
With the over-saturation of information on PSD2 Moneyhub is increasingly being asked to provide advice on how best to negotiate the new legislation. So, we’ve produced a simple concise publication that will offer information and advice to all those affected by PSD2. We don’t want anyone to miss out on understanding the key pieces of legislation, dates and milestones as well as the incredible opportunities PSD2 offers everyone - consumers and businesses both benefit from this legislation. This publication details how to be prepared for PSD2, what it will change for businesses and consumers, and ultimately how to best make use of it so as to maximise its potential in a fast-changing market.
Time is of the essence. A business that has been providing perfectly legal services up until now could be breaking the law if it has failed to register with the Financial Conduct Authority (FCA), and ignorance can not be used as a form of defence. Therefore, this publication will not only help provide advice on how to remain the right side of the law (if you aren’t sure) but also how best to make use of this most excellent change.