Open banking regime will allow data sharing from tomorrow

A new era in banking law comes in tomorrow (13 January) when customers become entitled to have their financial information shared – securely – with other providers.

Under what is known as the Open Banking regime, brought in under EU law, information held by banks regarding customer accounts is treated as the customer's data, which it is their right to share with, for example, another lender with which they might seek a better overdraft deal.  

In future no UK bank or building society will be able to prevent a third party holding permission from accessing a customer's account, unless they suspect fraud or lack of proper authorisation.

While some, including Lloyds Group, Nationwide, Allied Irish and Danske Bank, are ready to operate the new rules, the Competition & Markets Authority has allowed up to six weeks' additional preparation time to RBS, Barclays, HSBC and Bank of Ireland. 

New mobile phone apps will be able to offer advice based on spending patterns, or alternative products that may save a consumer money on spending such as utilities.

Some have warned that people could end up being bombarded with invitations to try out new services, and of the risk of security breaches.

Banks will be obliged to refund money taken from an account in any unauthorised transaction.