UK Credit Guide: Open Banking
Open Banking is a relatively new technology that allows secure sharing of bank account information with businesses within the UK. While the system can be a great benefit to many consumers, some are still unsure of how it works, why they should use it and most importantly, is it safe? We’ve tried to answer all your questions below.
What is Open Banking?
Introduced in 2018, Open Banking is a technology that uses a clever API system to electronically share information from your bank accounts with regulated financial services businesses (like us). If you’re one of the 1 in 4 Brits who hold more than one bank account with different lenders, Open Banking could make your life a bit easier. Bank account aggregator apps can use the technology to combine all of your accounts together, so you can view and manage all of your accounts in one place.
Is Open Banking safe?
While the idea of sharing your bank information is probably raising alarm bells – don’t panic! Only relevant information such as your transaction data is shared. When you log in to Open Banking, you do so via your bank’s website so your passwords and pins are never shared with anyone else. As an added benefit, you need to specifically authorise businesses to view your accounts via open banking, so your information is only shared with trusted companies and you can withdraw your consent at any time.
How does UK Credit use Open Banking?
As a responsible lender, UK Credit needs to perform a number of affordability checks on our applicants before we can approve a loan. Open Banking’s technology greatly improves this process by allowing us to assess the income and expenditure of our customer’s accounts without them needing to send us copies of their bank statements. More details on how UK Credit use Open Banking can be found on our dedicated Open Banking Page.
Please note, none of these articles are intended to constitute financial advice and should be used for informational purposes only.