A fundamental change to the way people can bank, manage and spend their money in the digital world is under way. A change in the law and the start of the Open Banking system means people can allow businesses, other than their bank, to access their financial data.
Organisers say this has the potential for consumers to get better deals, such as cheaper overdrafts, and to speed up the switching process. But warnings over fraud risks have already been issued. As part of the same legislation, surcharges for payments made by credit card, debit card, or other payment systems such as PayPal will be banned. How it works Traditionally, banks have held all our information about our past transactions and spending habits. A change in UK law now means that banks and building societies must allow regulated businesses access to a customer's financial data, but only if the customer has given their permission. The bank can only block access if it suspects fraud or unauthorised access.
The UK's Open Banking system should ensure that such access is given by the UK's nine biggest current account providers in a secure way, and without the need for customers to reveal their online banking login details or passwords.
source: www.bbc.com
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