The “open banking” regulation requires that banks share with other companies, from fintech to retailers, the spending data that they have collected from customers, with their consent, and to facilitate payments from their accounts. The idea behind the regulation is to offer superior banking services to customers, which is better aligned with their own activities such as online shopping.
The Competition and Markets Authority (CMA) has stated that Barclays, RBS, HSBC, Santander, and the Bank of Ireland will be delayed in adopting these regulations, with delays expected to range from a few weeks to several months. RBS Bankline Business customers are expected to take until February 2018, whilst Santander’s Cater Allen Private bank (with forty thousand active business current accounts) are not expected to be ready for the regulation until January 2019, due to the necessity to update their IT systems.
On the other end, AIB Group, Danske, Lloyds Banking Group, and Nationwide stated that they are ready for the regulation. The extension for the banks, issued by the CMA, is for six extra weeks.
Open banking is a legislation required by the Second Payment Services Directive (P2D2), with the vision being a space where businesses can share financial data with third parties, in order to get better deals on loans and financial services. Ultimately, the legislation aims to create more competition within the banking industry and to encourage innovation, creating opportunities in terms of data-pricing and customer-validation, such as KYC and fraud checks. If you are running your own business, this legislation opens a new perspective on how to manage your finances, and on how to get paid faster, on your Cloud accounting solution.
To understand more about how this can benefit your business, as well as on using Cloud accounting with QuickBooks Online to get paid faster, please talk to us directly.