Report says data sharing could improve competition in UK banking sector
A new report from the Open Banking Working Group (OBWG) revealed that data sharing between banks could help consumers compare banking products and encourage competition in the sector.
The OBWG was established by the UK government in November to explore how data about accounts transactions and mortgage payments can be shared across the sector, Reuters reported.
The government intends to increase competition in the banking sector, which is currently dominated by only HSBC, Barclays, Lloyds, RBS and Santander UK.
The report is calling for the introduction of new data-sharing rules by the end of this year which would not only allow customers to find the suitable financial product but also allow companies to share information electronically with their accountants, according to the publication.
Currently, banking data cannot be easily shared with a third party in a machine readable format for feeding into apps or for use by new banks.
The new standard is expected to provide financial technology sector with opportunities to improve by by creating new apps and services in banking.
British Bankers' Association CEO Anthony Browne was quoted by The Financial Times as sayinf: "Opening up data from everyday bank transactions -- known as 'open banking' -- has the potential to revolutionise the way consumers and businesses manage their money.
"Making more bank data openly available will make it easier for people to shop around for products tailored to their needs and get the best deals.
"But crucially, no data would be shared without the explicit consent of the customer and that data will be protected with robust security checks."
Image: OBWG was established by the UK government to explore how data about accounts transactions can be shared across the sector. Photo: courtesy of adamr / FreeDigitalPhotos.net.