Looking ahead to 2018.
December 15th, 2017.
Looking ahead to 2018
With 2017 quickly drawing to a close it seems a good time to reflect on where we are with Open Banking ahead of January's implementation date. To recap, Open Banking has been developed following a lack of competition among the primary banks and will come into effect in January 2018. At this time, bank APIs will become available from the nine largest U.K. banks as mandated by the CMA.
The primary benefit of the Open Banking movement is intended to be an evolution in consumer choice but Open Banking will also likely drive innovation and growth both among new businesses in the financial technology space and the banks themselves. Additionally, this unified standard will give consumers more control over what they want to share and an environment in which to do this safely.
Services such as comparison websites and apps which are able to compare various products and services to offer better deals and lower costs will be supported by having access to the individuals live financial outgoings. Similarly, personal financial management tools which bring together all of your accounts in one place will become more reliable and more secure, making it easier for people to take control of their finances. Control of your data and where it is used is a core component of cyber security and identity, especially in the connected online world that we live in. The ability for consumers to have complete visibility within their online banking platform of where their bank data is being used and which third parties have access to the data will increase consumer confidence.
Open Banking is the UK initiative and in Europe, the second Payment Service Directive (PSD2) is leading other countries to introduce similar standards. Further afield, the US Consumer Financial Protection Bureau which has responsibility for consumer protection in the financial sector have acknowledged that roughly 45 million Americans have either no credit history or credit history too scarce or stable to generate a credit score. As such they have identified a need to explore innovative ways of expanding access through alternate forms of data, such as bank data and alternate methods of analysing this data to assess the creditworthiness of applicants.
By integrating the APIs of the main banks, and continuing to use live market data where APIs are not available or are not sufficient, DirectID will be among the quickest and simplest ways for financial services companies to access consumer bank data and take advantage of PSD2 and Open Banking without the need to register themselves and integrate bank APIs. The ID Co. has begun testing Open Banking with a number of major UK banks within the DirectID platform, with a view to adopting direct APIs as they become available in 2018.
As a business that is built on open bank data already, and that has been operating in the space for over seven years The ID Co. is one of the few existing propositions familiar with leveraging this data. DirectID is actively providing this data in more than 30 countries today. With a wide range of customers with consumers over multiple countries, The ID Co. has a unique perspective and deep insight into exactly what data holds the value.
Implementation of Open Banking is due in January 2018 at which point DirectID will utilise direct bank APIs alongside live market data to continue offering bank data to UK customers. As APIs become available for more banks around the world, The ID Co. will continue to increase this coverage.
If you want to discuss how DirectID can help your business get the benefits from Open Banking, get in touch with us here
You can read more about Open Banking and our involvement by ready our blogs:
- The Journey Towards Open Banking
- How PSD2 And Open Banking Benefit The Consumer
- Paving The Way For Global Open Banking Standards
- Getting PSD2 Ready
DirectID by The ID Co. provides a world of convenience for businesses and their customers. Trusted customer verifications and real-time financial profiles combine to help businesses increase conversions, reduce fraud and make more accurate affordability decisions for financial products. The global platform combines a frictionless user experience, full customisation, reporting and data insights available through API integration or a hosted service. Learn more at https://directid.co.