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On the 13th January, the way the banking industry is running will change, giving more control to the customers. This new rule known as open banking may be detrimental for the major banks. As all of the nine major banks will have to comply soon.
This open banking means that customers have their own power to choose to easily and securely move/transfer their own information/details. This can be transferred to other banks and financially regulated companies.
What is the aim?
The aim of allowing other banks and financially regulated companies to see our data is to try and allow them to give us the best deal. As it is found that only 3% of the personal customers move their accounts each year, found by the Competition and Markets Authority (CMA). This is allowing banks to charge higher rates as it is rare customers will shop about for the best deal and therefore stay with the same account.
Allowing this power to customers should see banks competing against each other to try and give customers the best deals. This open banking regulation will allow you to share data electronically, and eventually you should see a dashboard in your online banking app. This will show you how much money is in your account with different banks. Eventually showing how much you owe on credit cards and store cards.
How will it affect banks?
This is likely to transform the way customers use and look at the banking industry. The banks will become more competitive to give the customer the best possible deal. David Duffy, the chief executive of Clydesdale and Yorkshire Banking group, stated that this could make some banks disappear over time.
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