13th January was the day when Open Banking came into reality for consumers of the UK. Open banking gives the full capability to the consumers by handing them the opportunity to access to all information about them smoothly. In this context, the consumers assert more control that the authority. The Revised Payment Service Directive or PSD2 that came into effect in the UK render this service to the consumers of the UK.
- Services and entities rendered by this regime are almost similar to the financial institutions and well-established banks. Customers hold the legal right to use an authorized third party to make payments on their behalf and to access data.
- The UK retail financial institutions have been mandated by CMA’s Retail Banking Market Investigation Order to implement and develop API standards for the current accounts which provides a solid platform to the UK to start implementing services of PSD2.
- Till now, there have been 65 Payment Service Providers authorized to provide services. Among them, 46 have already launched live products in the market along with banks launching their own services of Open Banking hand in hand.
- Through Open Banking other milestones can be achieved such as building the data infrastructure of the UK. To ensure a secure and open flow of data between people services and organizations, a set of technologies, rules and standards have been described. The process is pretty much similar to the transportation services provided by roads and railways to connect each and every part of the country.
- The estimation reports show that somewhat between 150,000 and 600,000 consumers could be availing these services in the present day.
- Commentators have mentioned that the year 2019 would be a critical year. Open Banking infrastructures would contribute to the registration of firms in great numbers along with the maturation.
- Around 84 firms have been recognized by the FCA which have met the criteria to launch this service. Though most of them have not publicly launched their services yet.
- A company can integrate the availability of these services with budget planning, account aggregation and quicker credit checks which could be helpful to the users.
This is definitely something to shout out about. An app that can manage accounts, debits, credits, check financial situations of multiple accounts and loans at the expense of the customer paying all the bills on time, is really worth of appreciation. Who would provide such services anyway?