UK govt pushes ahead with plan for open banking API standard

UK govt pushes ahead with plan for open banking API standard

The UK government has promised to work with banks and fintech firms to have a detailed framework set out for an open API standard by the end of the year, in a move it claims will empower consumers and boost competition.

At the end of this month the government's midata initiative will launch, enabling Brits to download a year’s worth of their current account transactional data in a single file that can be read by online tools.

This, along with a new Gocompare current account comparison tool, will make it easier for users to see where they can get the best deals, forcing banks to work harder to retain customers, argues a new government report into banking in the 21st century.

However, chancellor George Osborne has already set out plans to go further through an open API (application programing interface) standard in UK banking.

Last month the government launched a 'call for evidence' on the benefits of greater data sharing and use of open data in banking, noting that although APIS are being used, a lack of standardisation is hindering their potential.

Standardisation would allow the development of third-party apps that are compatible with the systems of all UK banks, and that can securely use customer banking data, with their
permission.

A common API standard would have particular benefits for product comparisons, says the report, improving on midata by being more user-friendly, taking into account a wider range of data, and being much more customisable.

"Going beyond comparisons, the potential range of applications is limited only by app developers’ imaginations, ranging from apps that can work out where you like to eat out and email you special offers, to apps that can turn saving into a game with achievements unlocked as personal milestones are reached, and beyond."

Read the Banking for the 21st Century report: » Download the document now 521.3 kb (PDF File)

Comments: (5)

A Finextra member
A Finextra member 19 March, 2015, 09:30Be the first to give this comment the thumbs up 0 likes

It seems like competition is the goal and APIs the solution. In technical terms an API is a standardised interface 3rd party applications can use to get access to your bank account. Today,  these 3rd parties is not regulated as banks and I doubt that they are ready to take the hit and pay me back when something goes terribly wrong. Any comments?

Tom Hay
Tom Hay - Icon Solutions Ltd - London 19 March, 2015, 10:47Be the first to give this comment the thumbs up 0 likes

Bjorn, regulation of these 3rd parties is one of the main planks of PSD2 - the so-called Access to Account (XS2A) provisions. Your comment about standardisation is key - the EU is delegating to the European Banking Authority to define the features of the APIs, but if the definition is left too loose, it won't enable interoperability, but if it's too tight, it might strangle innovation. How the UK APIs will fit into this framework - or vice-versa - remains to be seen!

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 19 March, 2015, 10:58Be the first to give this comment the thumbs up 0 likes

For ages, NetBanking websites have been letting users download current account statements. I remember Kublax was one PFM that used these statements as input. However, as I'd highlighted at the time, static downloads don't cut it when deals and offers keep changing all the time. I remember seeing current account comparison tools on a few comparison websites over 5 years ago. Cardlytics and BillShrink / TruAxis are only two names I readily recall of companies that link to current and card account transaction histories to do exactly what the government's API approach seeks to do.

Not sure who is going thru' a time warp here:)

George Anderson
George Anderson - EEI - NY 19 March, 2015, 21:10Be the first to give this comment the thumbs up 0 likes

This is seriously stone age.

An API "enabling Brits to download a year’s worth of their current account transactional data in a single file that can be read by online tools." 

Back to the PAST! 

A Finextra member
A Finextra member 20 March, 2015, 09:43Be the first to give this comment the thumbs up 0 likes

Tom: OK, Say that the 3rd parties becomes regulated and the end result is that user's money are secured eve if they experience massive fraud, they run out of money.. etc.

These innovators would need to:

  • have bank grade security
  • be financially very strong
  • produce a lot of reports to different authorities

Sounds pretty much like banks to me..

So bankers: PSD2 can become a golden opportunity and not a threat!

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