Remember when GDPR was the new set of regulations on everyone’s lips? Well, now there’s another new directive in town – PSD2, or the Revised Directive on Payment Services. This new set of rules aims to ensure that consumers are better protected when using online banking and payment services, and to promote development and innovation within that industry. So, what is open banking? Open Banking is the resulting technology from these aims.
Open Banking improves the accessibility and security of how bank customers can access or share their banking information. The regulations require banks to maintain an open API system, to which any software developer can build a connection; and these new API systems should be up and running by 14th September 2019.
These connections could be for a variety of purposes – whether that’s collating and reviewing your income and expenditure from multiple different sources; streamlining your payment processes from information in other systems not currently linked to you bank; gaining access to alternative funding sources such as invoice factoring providers outside of the normal high-street lenders; or perhaps just giving you better oversight in to the inside-outs of your bank account.
You may think that this isn’t much of a change if, for example, you are already used to having your bank connected to and feeding transaction information to your accounting software – and you are mostly right.
In such a case Open Banking is just a potential change in the background working of that system, but Open Banking provides that experience for a much wider variety of banks, account providers and regulated services.
If you want to take advantage of an Open Banking connection, you will need to be using online banking, but once you have access to this you are able to control which services you connect to and benefit from.
For more information and to search the institutions already signed up to Open Banking, visit the website at https://www.openbanking.org.uk/.
If you’re interested in moving your business systems and records online to take advantage of Open Banking, get in touch with us to discuss your options.
If you have any questions about your business please get in contact with our farms and estates team.
Read the full Autumn 2019 Newsletter here.