29 September 2017

How does Open Banking affect me?

Open Banking is the freedom you’ll have, from 13 January 2018, to securely share your current account transaction information with other organisations to benefit from new services and open new ways to make payments. These new services could make managing your money simpler, applying for new products quicker, or comparing different products easier.

Why is it happening?

Open Banking is being led by the UK's Competition and Markets Authority (CMA) in collaboration with us, consumer groups, banks, online retailers and financial technology (fintech) providers.

The idea is to make the banking industry more competitive, provide more choice for consumers, encourage better services and support innovation.

It's happening partly because of UK and European banking regulations, but also because advances in communications technology now allow third party providers (TPPs) to access and share information with consumers securely. They do this using things called Application Programming Interfaces (APIs).

It isn’t obligatory and it’s not for everyone but at Nationwide we believe in giving you the choice. You’re in control of who you share your information with, and you can do this from January to benefit from new services that you like the look of.

Importantly, you’re in the driving seat, nothing happens without you giving consent and security checks are in place to make sure that your data is securely shared between us and other providers using the API’s we mentioned earlier.

New possibilities

It's early days, but we can already picture ways in which you could benefit.

Imagine, for example, that you're in the market for a new home. Open Banking will allow you to securely share your personal banking transaction data to check how much you can borrow without having to send in paper copies.

Sharing detailed personal financial data could improve everyone's experience of comparison shopping for financial products. And you’ll be able to do it within a matter of hours from the convenience of your home computer, tablet or smart phone.

It’s likely that new apps will enable you to see all your accounts with us and any other organisations in one place. This can make it easier to manage your everyday banking needs, monitor your comings and goings and to make better decisions with your money.

For example, an app that monitors your spending patterns with the goal of saving you money over the long term. If the app spots that you have enough money in your Nationwide current account to clear your balance on your credit card, it could then calculate your savings on the interest you would otherwise need to pay and message this information to you. With your consent, the app could then make that payment, thereby helping you avoid unnecessary charges.

Open Banking could also lead to the development of smarter apps that analyse your day-to-day finances and then use that information to provide you with personalised product recommendations.

So, lots of possibilities.

How you take advantage of Open Banking

First things first though, you need to be registered for our Internet Bank and Mobile Banking app to give TPP’s access to your account information.

They will ask for your consent to access your information, and if you give it, they will send us a request and then after a security check to ensure that they are the Open Banking Directory, we will process their request.

You give your consent in much the same way that you do when you log on now.

The same process applies if you want to let them make a payment on your behalf.

Staying safe - things to watch out for

With Open Banking, there's no need for you to share your account login details, PIN or passwords with anyone at any time. It will provide the same level of security that we apply to our Internet Bank and Mobile Banking App.

However, you do need to be mindful that some providers are not registered for Open Banking but have services you might be interested in. These TPPs operate outside of the Open Banking framework. In this circumstance, the TPP may ask you to share your login credentials with them. It’s entirely up to you whether you do but please be careful. You need to be absolutely confident that the organisation you’re sharing your information with is completely trustworthy and authorised or regulated.

It’s important you know that we’ll not be responsible for any losses you may face if you do share your login credentials or account information with anyone other than an authorised or regulated Third Party Provider.

There is a danger that phishing emails may increase so don’t forget all our usual guidance around phishing emails from fraudsters pretending to be an organisation they’re not. Look out for those tell-tale signs. Alarm bells should be ringing if:

    1. It’s not addressed to you personally 
    2. The punctuation or spelling is poor 
    3. The design looks accidental.

For more information go to our online ‘security centre’ on our website as we keep that constantly updated with the latest guidance to help keep you safe. If you ever suspect fraud on your account, please get in touch with us straightaway.

You can also read our recent article, ‘What is Open Banking?’ for more information on the initiative.

Whatever you decide

One thing’s not going to change: whether you decide to make use of the new services that come with Open Banking or whether you’re happy to continue to bank as you do now, Nationwide is your Society, run for your benefit. It’s what sets us apart from the banks. And our purpose is exceptional too - to help 15 million people across the UK, our members, get more from their money, every day.

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