Open Banking: A Challenge Or An Opportunity?

New rules meaning banks must let customers share financial info with other authorised providers are now in effect. But why have these 'Open Banking' regulations been brought in and what do they mean for businesses? Banking and finance lawyer and FinTech expert Adrian Shedden gives us the lowdown.

In the simplest of terms, Open Banking is a number of reforms to the ways in which banks deal with financial information, as called for by competition watchdog the Competition and Markets Authority (CMA). Its introduction came alongside the implementation of the second Payment Services Directive (PSD2) in January. The purpose of the changes was to encourage more competition and innovation to financial services. In the business context, the overarching opportunity is increased transparency of information. This can come in the form of the businesses as service providers and also service users.