A new era in banking is upon us. In January, open banking was launched across the European Union, giving a new generation of service providers a chance to thrive.
At the heart of the movement is data-sharing. Open banking, under the EU Revised Payment Services Directive, or PSD2, means third parties can link up to a consumer’s high street bank account, so long as he or she consents. Mobile app Yolt is a great example. It gathers data from a consumer’s multiple accounts and provides an aggregated overview of their spending habits.
But open banking might also mean a new era of fraud. RBS chairman Howard Davies warns: “We are not confident that our customers’ data will be protected from hackers and thieves. We cannot refuse to hand over data because that’s what the legislation says, but we will have to try to educate people to understand the vulnerability.”