21 October 2017

HSBC moves into open banking

28 September 2017  |  33498 views  |  12 HSBC sign

HSBC is testing a platform that lets customers see all of their accounts, no matter who the provider, on one screen.

The open banking platform will be tested with 10,000 UK customers from next month, with participants able to add accounts from up to 21 different banks, including Santander, Lloyds and Barclays.

The service - set to go live for all customers through a new app early next year - will not just be restricted to current accounts but also cover loans, mortgages and savings, if they are visible via online banking services.

HSBC says that this is just the first feature of the new app, with a host of other options in the pipeline for beta testing over the next few months.

Soon, customers will have access to a Safe Balance feature which shows them how much disposable money they have before their next payday, while a Spend Analysis option will categorise spending, adds tags, notes and photos to transactions and analyse patterns for more informed decision making.

A Digital Coach will provide insights into spending and offer tips on better money management, while a Saving Rules tool will round up spending amounts and send the extra to a savings account.

Raman Bhatia, head, digital, UK & Europe, says: "Lots of people ask us if a big bank like HSBC is relevant in today’s competitive fintech landscape. What sets us apart is that we have millions of customers, which provides a unique insight into how we can continue to improve our digital banking offering.

"The HSBC Beta platform allows us to test, learn and develop in a live environment, and then deploy the new technology at scale. To achieve this, we have changed from the inside out putting in place digital delivery teams that are completely cross-functional, including all the skills we need in one place - developers, designers, risk and compliance and marketing.

"This joined-up view of your money is just the starting point for new features that will be added to the Beta platform over the coming months. These features were developed to answer specific customer needs, such as joined-up banking, and allows us to examine behaviour in early demos before launching a brand new app to customers early next year."

Comments: (12)

A Finextra member
A Finextra member | 28 September, 2017, 09:41

They should try Afterbanks

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Alexander Peschkoff
Alexander Peschkoff - TEDIPAY - London | 28 September, 2017, 10:36

Opening Banking means that third parties can connect to banks' backends via API. Surely, a bank can be such a third party in respect of other banks, but one would expect such a bank to play ball (i.e. open up its own backend too within the same solution).

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Paul Love
Paul Love - Compass Plus - Nottingham | 28 September, 2017, 12:49

First Direct (HSBC) offer a similar service via old fashoned account aggregation for the past few years. Sadly it was tied to IE/ActiveX and I can no longer use it.

I guess they did not invest in this as "screenscraping" looks to be banned in the new world.

I wonder how many of their custemr used "Internet Banking Plus" and how many will use the new service?

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 28 September, 2017, 19:32

My bank introduced this kind of online aggregation portal around 8 years ago and shut it down around 6 years ago for lack of consumer uptake. IMO, until someone comes up with a "killer feature" for account aggregation, I have strong doubts if Open Banking / PSD2 will move the needle on driving mainstream adoption for PFM / MoMMA technology, especially when it requires customers to share their online banking credentials with third parties. Innovative Fintechs Don’t Need No PSD2 Regulation

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Alexander Peschkoff
Alexander Peschkoff - TEDIPAY - London | 28 September, 2017, 19:59

I think I'll disagree with Ketharaman. Just because something didn't work in the past doesn't mean it won't work in the future. iPod was not the first MP3 player out there, and iPhone - not the first smartphone. PSD2 does make some things easier to implement - not that guarantees success per se. It's not about "what", it's about "how".

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James Piggot
James Piggot - Finastra - London | 29 September, 2017, 07:23

I have used the Moven app for the past year that aggregates bank accounts and credit cards across banks. It monitors spending and categorises transactions

But why not take it further, show total assets including current valuation of your property and up to date value of pension funds and other investments?

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Rajesh Tiwari
Rajesh Tiwari - Wipro Ltd - London | 29 September, 2017, 07:23 Great and all bank across U.K is doing it, isn't it a bit too early to announce ? I must admit that it is good initiative from the regulators and will bring superb customer experience
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Suzanne Kennaugh
Suzanne Kennaugh - Yorkshire Building Society - Leeds | 29 September, 2017, 09:05

Fascinating move, and shows HSBC stealing a march in the data collection game...easy to personalise offerings to customers where it has access to all their financial data...   

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Ralf Ohlhausen
Ralf Ohlhausen - PPRO Financial Ltd - London | 29 September, 2017, 09:33 I bet they use screen scraping like 99% of similar apps. It is incomprehensible that EU regulation seriously considers banning such technology. PSD2 was not build to ban it, but to improve its security by requiring licensing/supervision, audits, identification towards the banks and strong customer authentication. APIs may take over over time, if they work well, but the world has not yet seen one offered for free to competition. This is a completely new concept and it is questionable - to say the least - that banks will make it easy. Elevators were build in addition to staircases not to replace them - same here. If regulators want to start banning successful technologies, which have risk elements, they should better put their eye on nuclear power or AI.
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A Finextra member
A Finextra member | 29 September, 2017, 13:04

Hi James, something like Microsoft Money but with automated data, and that works on a smartphone then.  I too want that, but how many others are really that interested?

Moven are not telling me that by moving credit card with provider X to provider Y I would be Z pounds a year better off based upon my usual behaviour.  That would really add some value.

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 29 September, 2017, 19:03

@AlexanderPeschkoff:

I don't disagree - as I've acknowledged with the "killer feature" part of my comment. 

That said,

  1. The same Apple of iPod / iPhone fame killed Newton 20 years ago and never reentered PDAs probably because it couldn't find / there wasn't a killer feature in that product category. So passage of time is no guarantee of mainstream adoption.
  2. Furthermore, technology changes rapidly and Finsurgents make 5 year rolling forecasts of death of branch, plastic, cash, etc. So passage of time is not a luxury that technology can expect either.
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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 29 September, 2017, 19:22

@JamesPiggot, @AnonFinextraMember:

+1.

In my post Innovative Fintechs Don’t Need No PSD2 Regulation, I'd given another example of truly valuable money management tip that I look forward to getting from PFMs/MoMMAs: "Earn $$$ more by sweeping X amount from a checking account to a savings product."

Looking at all our wishlists, one common theme emerges about what consumers would find valuable: Tips to maximize ROI of portfolio aka bang for the buck. 

With the passage of time, I'm realizing that tips alone won't suffice. With the constant dumbing down of branch and remote channel staff, executing a tip entails a lot of friction. Many times, I know I'll gain $$-$$$ by changing plans or $$$-$$$$ by changing providers but it's so painful to actually make the switch that I let the opportunity go by.

Perhaps the killer feature for online aggregation is fulfillment of tips (with consumer's approval, of course) related to products, plans and even providers such that switching banks stops being more painful than the proverbial root canal surgery. If they supported that, PFMs/MoMMAs will easily be able to charge a percentage of gain / savings to users for using their service.

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