- Open Banking rules come into force in the UK on Saturday, January 13.
- The rules force banks and payment companies to share data with third parties if customers agree.
- The changes are meant to encourage comparison and bank account switching but some think an unintended consequence could be opening up banking to tech giants like Facebook and Google.
LONDON — New rules come into force in Britain today that force banks to open up their data to outsiders.
“Open Banking” begins on January 13. The new rules force Britain’s nine biggest banks to share customer data with third parties if a customer agrees. The changes are meant to improve price comparison and boost account switching. (You can read a full guide here.)
But many market watchers speculate that an unintended consequence of the new rules could be to lure tech giants like Facebook, Google, and Amazon into mainstream finance in the UK.
David Birch, a digital financial consultant and speaker, wrote in Wired UK recently: “In 2018 the banks will concede customer mindshare to the GAFAMs (Google, Apple, Facebook, Amazon, Microsoft) and the BATs (Baidu, Alipay, Tencent).”
Birch pegged Open Banking, which also lets the likes of Facebook carry out payments on your behalf, as the main reason he thinks this could change.
He wrote: “Next time you need to send your friend a tenner, you’ll instant-message them the money, rather than opening up your boring bank app, fiddling about finding their bank details, authenticating yourself again and finally firing off the cash. You’ll just type “+£10″ in your WhatsApp chat.”