Open banking was mandated by the EU in 2016 with EU Member States required to transpose it into National Law. It was implemented in the UK in January 2018. Its purpose was to allow financial information to be made available to outside companies such as other banks, non-banks and fintech companies if permission was given by the customer. Over the last few years, it has spawned many mobile apps giving bank customers better service and convenience.
Early take up came from suppliers of accountancy software such as Xero and QuickBooks, allowing them to download bank statements directly into their cloud software. However, there was a little niggle. The Payment Services regulations required the customer to confirm their approval to the bank every 90 days. Users of accounting software will be well aware of this little chore. It seemed a sensible precaution at the time but turned out to be a real nuisance. Accountants, who were the main user of the apps, were inundated with dozens of renewal messages and had to repeatedly chase clients to log into their bank and re-approve.
The software providers lobbied to have a more relaxed approval process and the powers that be agreed. Most banks and software houses have now updated their systems. Xero, probably the world’s most popular small business system has just notified their subscribers that any user can now renew their approval by simply clicking a button. No need for a signatory to log into the bank.
Technology does often make life easier. Microsoft’s AI systems helped me to write this article by guessing the next word I was going to use. Amazing!