Barclays and Lloyds banks have been contacted by the competition watchdog after failing to comply with open banking rules around making data available to third parties through application programming interfaces (APIs).
Open banking relies on accurate information being made available to third parties by banks, via APIs.
The Competition and Markets Authority (CMA) has written to both banks about their failures. Barclays published inaccurate information 13 times, and Lloyds 10 times, according to the CMA.
“Failure to make continuously available accurate, comprehensive and up-to-date information on products and services can mean that consumers take wrong decisions and they may therefore choose financial products or services which are not best suited to their needs,” wrote the CMA.
PSD2 enables third parties to access the customer data held by banks via APIs – if customer consent is granted – and offer services using this information. For example, a company – with your consent – can take a payment directly from your account without you leaving its website. In the UK, the Open Banking Regulation is its equivalent.
The end goal was to increase competition in a sector dominated by large financial services companies. Back in 2016, the British Banking Association said opening up data from everyday banking transactions had 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,” it said.
The take up of open banking in the UK is accelerating as fintechs and challenger banks offer compelling financial products that use open banking functionality.
Data from the nine banks reveals that over five million people in the UK are actively using open banking services, four years after being mandated by the CMA.