Which companies are regulated providers of open banking?

Open banking is set to revolutionise how we interact with the financial sector. With streamlined means by which to pay and share our data, open banking has the possibility to open up markets and create added value for consumers.

In the UK, open banking is the term used for a framework introduced by the Competition and Markets Authority (CMA). First implemented in 2017 by licensing the nine largest banks and building societies, open banking aims to give customers control over their financial data and increase competition.

Existing laws and regulations offer protection for transactions and data sharing in the financial sector. However, the radical changes implemented by open banking require a specific regulatory framework of providers to address wide-ranging intellectual property and licensing implications.

How is open banking regulated?

The UK is taking a top-down approach to open banking regulation through the Financial Conduct Authority (FCA) to enable data sharing between the initial set of banks and building societies and registered third party providers.

Under the FCA rules, providers must have approval as speciality providers or payment businesses either in the UK or under current passporting arrangements. The provider is then under direct supervision from a UK or EU regulator. 

This framework then aligns with the EU’s revised Payment Services Directive (PSD2), which requires providers to be PSD2 compliant. The entire regulatory framework allows the CMA to promote open banking as a transparent and secure way for consumers to control their finances.

Checking for authorisation

To streamline communication between banks and third parties, the CMA established the Open Banking Implementation Entity (OBIE). This oversees a dedicated IT platform known as the Open Banking Directory which allows regulated providers to enjoy a secure exchange of information via open APIs (application programming interfaces).

Open banking is also working to provide an authorisation dashboard that should make it easy for customers to access information and cancel permissions. Third-party providers are being encouraged to provide their own mechanisms.

The Financial Services Register allows consumers to check whether providers are authorised to provide the following services:

Regulated firms often specify in their terms and conditions that the customer is responsible for checking that the third party provider is appropriately regulated. 

Customers with complaints about a provider have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme, depending on the nature of the complaint.

Regulated providers

A growing number of financial services providers are signing up to the Open Banking platform. They are fully regulated and able to provide critical Open Banking services regarding payment and data sharing.

The right Open Banking provider can pave the way for small businesses and individual customers to get a better deal and get more out of their money with at-a-glance comparisons and financial information.

Targeting SMEs, this global platform delivers rich insights from sales and cash flow to marketing performance. Data can be easily accessed via the smart dashboard.

This global provider offers a cash management solution via the Slide app and Cashfac Virtual Bank Technology (VBT). The app delivers a real-time cash flow overview for SMEs, while the VBT platform allows businesses to control and automate cash management processes.

A leading challenger bank, Clydesdale Bank launched its aggregation service in 2018. Via the innovative iB platform, customers can benefit from the fast and efficient implementation of digital services.

The easy way to invest – simply round up your purchases to the nearest pound and invest directly in simple tracker funds.

Best known for credit score management, Experian Open Banking uses your credit score, income and liabilities to create a complete overview of your financial health. Organisations use this information to provide better customer experiences.

Available for individuals or SMEs, this B2B2C software facilitates integration with the credit application process. Users provide consent and authentication before data is accumulated and analysed.

Used by 2.5 million small businesses worldwide, Quickbooks makes it easy to grow your business or access accounting services.

Sage is a leading provider of payroll, accounting and payment systems for the world’s entrepreneurs. Sage Open Banking APIs enable bookkeeping automation, freeing up time and increasing efficiency.

This financial provider makes sending money overseas cheaper and faster using real-time exchange rates. Borderless accounts make international travel and work a snap, allowing you to manage money seamlessly without fees or adverse exchange rates.

This Swedish FinTech company facilitates fast, simple and secure personal or business account online banking transactions. Trustly supports over 3,300 banks across 29 European countries and is a popular solution for e-commerce with its instant payment system.

The social way to plan and be paid, the Vibe app is widely available and enables secure payments directly from the bank. It also provides a frictionless solution for marketplaces and merchants.

Whether you need a quick and clear view of your finances or a streamlined way to pay, a regulated Open Banking provider can deliver the services you need online or on mobile.

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