UK: Open banking comes into effect

Open Banking has landed in the UK. As of January 13th, 2018, UK banks have begun to open access to their consumer data archives to third parties, including other financial institutions, retailers, and technology firms.

The change comes as a result of new Open Banking regulations, which aim to increase the level of competition in the UK market and create greater transparency. All UK banks are required to comply with the new legislation, although some major banks have been given an extension beyond the 12th January deadline to enable them to set up data sharing systems.

Providers are expected to use this information to come up with personalised, competitive, and innovative deals on banking products such as savings, mortgages, and insurance. The regulations should also lead to more competition for non-financial products, such as telecommunication products and services.

Consumers will need to opt-in and give their permission for their data to be shared and can decide what information they want to be made available and how long it will be shared for.

Although the changes are now live, uptake of products and services that make use of open data may be subdued at first, with 40% of UK consumers indicating that they would be hesitant to share their data in this way. Furthermore, 47% of consumers would need a better understanding of the potential benefits of Open Banking before they would be willing to share their data.

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