CMA Requires Banks to Implement Open Banking System by Early 2018
August 09 2016 - 3:16AM
Dow Jones News
By Ian Walker
LONDON--The U.K. Competition and Markets Authority said Tuesday
that banks will have to implement an open banking system by early
2018, as part of a draft of measures designed to ensure that both
personal customers and small businesses get a better deal.
Open banking will enable personal customers and small businesses
to share their data securely with other banks and third parties,
enabling them to manage their accounts with multiple providers
through a single digital 'app,' to take more control of their
funds, the regulator said. It will also help them compare products
on the basis of their own requirements.
"The reforms we have announced today will shake up retail
banking for years to come, and ensure that both personal customers
and small businesses get a better deal from their banks," Alasdair
Smith, chair of the retail banking investigation, said.
"We are breaking down the barriers which have made it too easy
for established banks to hold on to their customers. Our reforms
will increase innovation and competition in a sector whose
performance is crucial for the U.K. economy," he said.
The CMA added that banks will need to publish trustworthy and
objective information on quality of service on their websites and
in branches, so customers can see how their own bank is performing.
They will also have to send out periodic and event-based 'prompts',
such as on the closure of a local branch or an increase in charges,
to remind customers to assess whether they are getting the best
value and to switch banks if they are not.
To underpin the reforms, the CMA will introduce measures to make
it easier for customers to search and switch accounts. At the
moment only 3% of personal customers and 4% of business ones switch
to a different bank in any year.
Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749
(END) Dow Jones Newswires
August 09, 2016 03:01 ET (07:01 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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