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HSBC partners Bud for open banking trial

19 October 2017  |  19449 views  |  9 Hipster teens with phone

HSBC has enlisted fintech startup Bud for the latest stage of its foray into open banking, trialling an app that lets people see account information from all of their providers, as well as get money management tips and product suggestions - including from third parties.

With PSD2 and the Open Banking rules fast approaching, HSBC has decided to embrace the brave new world of customer-owned data. Last month it revealed its open banking platform, which lets participants add accounts from up to 21 different banks, including Santander, Lloyds and Barclays.

The latest development will see 2000 customers of HSBC's first direct unit and 4000 non-customers take part in a six month trial of the app, which will feature a range of tools that draw on account information from across providers.

Users will be able to get a safe-to-spend notice, lists of transactions across accounts, a goals tool, virtual joint accounts, and a spending analysis.

Meanwhile, proprietary algorithms are used to suggest the most suitable financial and non-financial products and services based on individual needs.

Raman Bhatia, head, digital, UK and Europe, HSBC UK, says: "The first direct trial and the launch of HSBC Beta shows our commitment to delivering the best services and technologies to all our customers, across all our brands. It allows us to test, learn and develop in a live environment, and then deploy the new technologies at scale."

Comments: (9)

Abimbola Oloyede
Abimbola Oloyede - UNITED BANK FOR AFRICA - Lagos | 19 October, 2017, 07:22

This is great news! I can see the fire burning fiercely...

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A Finextra member
A Finextra member | 19 October, 2017, 21:13 As PSD2 APIs aren’t yet available, it must be assumed this uses screen scraping with customers having to surrender user id and passwords for bank accounts to Bud. Is HSBC taking responsibility for security risks or is it down to Bud or is it the customer carrying the risk? Not sure I would be trusting a Fintech startup with my bank credentials.
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Rajesh Tiwari
Rajesh Tiwari - Wipro Ltd - London | 20 October, 2017, 08:10

Great, bold and aggressive move. HSBC is showing to prove that they are leader in adopting to the new trends and policy. Any new initiative always comes with a question on security of data, but now that is a old school. All the Fintech includding startups has learnt that Data security is very important stuff and they have done all required majors to not to let breach the data privact. I am all up for it and looking forward. In todays world. more you share more you are secure.

 

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A Finextra member
A Finextra member | 20 October, 2017, 08:26 Rajesh, Is that a personal opinion or an official Wipro view? Here is the view of the FIDO Alliance who are pushing for a ban on screen scraping. “We do not see any way in which the screen scraping approach requested by the EC can be implemented to the level of enhanced security called for in PSD2…. Sharing passwords is simply a bad practice from a security perspective.” - Brett McDowell, Executive Director, Fido Alliance Equifax couldn’t secure their 500M+ customers data. What hope has Bud, a startup, got? Why would most customers trust them? In my opinion account aggregation is a good thing. For customers to trust it, banks need to implement it properly with secure APIs they take collective accountability for. This is the approach PSD2 and the SCA RTS standards have laid out. Allowing 3rd parties, especially unproven startups, to handle customer bank credentials should be a complete no, no and banks like HSBC should not be encouraging it.
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Rajesh Tiwari
Rajesh Tiwari - Wipro Ltd - London | 20 October, 2017, 09:18 Hi, Please note this is my personal opinion and not of my organisation. Screenscraping is a bad idea to share the data however I am sure this can be solved differently and you rightly mentioned by secure API implementation.
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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 20 October, 2017, 09:26

Anyone who thinks this is a "new initiative" needs a loud alarm clock to wake them up. Once they wake up, they might find out that MINT pioneered the PFM / MoMMA / Online Aggregation product category in 2006. In the decade following MINT's launch of its PFM website, several fintechs have entered and exited this space viz. WeSabe in USA and Kublax in UK. HDFC Bank introduced this in India around 5 years ago and shut it down a year later probably because it failed to gain traction.

Handing over your online banking credentials to a VC-funded startup is a bad idea to begin with, made worse by the tripe delivered by them in return. Nevertheless, I'll go back to using the first PFM app that fulfills the wishlist I've given in my blog post Innovative Fintechs Don’t Need No PSD2 Regulation.

Talking about security, when I hand over my online banking creds to a bank, I'm only worried about the ability of the bank to protect it from hackers. Whereas, when it comes to a VC-funded fintech startup, I'm not sure the startup itself wouldn't use it for illicit purposes when, for example, it needs to shore up its numbers before its next fund raise. If anybody thinks that's "old school", they need to have their head examined after being woken up by the loud alarm clock.

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A Finextra member
A Finextra member | 23 October, 2017, 11:33

In the UK Egg pioneered account aggregation with their Egg Money Manager from 2001 making account aggregation at least 16 years old.

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 23 October, 2017, 12:47

@Anon: TY for correcting my impression that MINT pioneered account aggregation / PFM. 

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Ramdas Narayanan
Ramdas Narayanan - Bank of America - Charlotte | 23 October, 2017, 20:22

Sounds like a neat concept, but exposing your different bank credentials to others, how safe is it, given the number of cyber attacks/hacks going on these days.

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