MARK CRIMEWATCH - OPEN BANKING

 

 

Reported to Farm Watch

 At about 3pm on 4th April, a property in Upper New Road, Cheddar was burgled. Two white and two black men were seen leaving in an orange Citroen. Police would welcome further information on 101, quoting Crime Ref 5218071310.

 

 

OPEN BANKING

The transfer from pen and paper to Information Technology (IT) in its many guises has seen convenience and speed outstrip public, commercial and personal understanding and security. While social media has enhanced communications, exposure has caused misunderstanding and embarrassment and has led personal information being bought, sold and shared without the knowledge of the individual. The current furore over Facebook is an example.     

As consumers expect instant, easy, and mobile responses, the UK Competition and Markets Authority developed ‘Open Banking’ to drive competition and innovation in UK retail banking. The concept encourages banks and building societies to share data via secure interfaces and an app that downloads information for consumers to search for cheaper financial alternatives, such services as mortgages, loans and investments. Cheap rarely equates to quality. The concept will probably see banks move from one-stop shop financial services to open platforms providing data and tailoring services, information and advice to suit individual needs.

In spite of the Data Protection Act  and while ‘open banking’ allows consumers to compare costs and take advantage of cost-saving measure, there are risks  Conceivably, the traditional concept of the local bank being used to lodge accounts is at risk as  consumer information is exposed to competitive financial providers of loans, mortgages or investments. The personal relationship between consumer and bank could disappear. Since ‘open banking’ relies on consumers authorising financial arrangements to be shared with third party providers, breaches of data confidentiality and fraud are likely. One estimate suggests that a fraud in UK is committed every 15 seconds and that stolen personal information is the main driver. Typically, data is ‘shared’ without permission or because the ‘owner/user’ has authorised it to be shared, but not necessarily understanding the implications. Most ‘nuisance’ phone calls and speculative emails are generated after consumers tick the ‘agree to’ share data boxes on apps, online sites and contract agreements. Think carefully before ticking the ‘agree to’ box on negotiated purchases. Another risk is financial ‘fronts’ buying and selling customer information in competition to legitimate financial institutions. Further, the incentive for financial institutions to persuade customers to change in ‘open banking’ will inevitably see them applying transfer fees.

While the concept of ‘open banking’ sets out to encourage competition and will probably develop into mainstay banking, the battlecry must be, as always, ‘Buyers! Be aware!’ Protect your personal information otherwise it will be bought and sold.

 

Will Human is thanked for providing his financial expertise to this article.

 

 

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