Open Banking is a new service that lets account holders share their financial information and give permission for banks and other organisations to make payments from certain accounts.
Open Banking was introduced by the UK's Competition and Markets Authority (CMA) to bring more competition and innovation to the financial services industry. It works using a secure system that lets you register with other banks or authorised organisations, known as third party providers (TPPs) and tells your bank to let them use your current account details.
It's your choice if you want to share your data. Open Banking gives the opportunity to share your information, but only if you give your permission.
The Payment Service Directive (PSD) is European law, which is translated into UK law as the Payment Services Regulation. This law tells banks and other providers how they should process payments and other services linked to providing payment services. The PSD was updated, and one of the changes introduced similar services to those in the UK's Open Banking rules.
The PSD changes mean that TPPs can see information about accounts and make payments on your behalf, with your permission. This applies to any payment account you can use online. Some TPPs ask for your Internet Banking details so that they can see and use your account details, because they can't use the methods introduced for Open Banking for some accounts. The services offered by TPPs and the way they access information is changing. Open Banking is now available for all our customers.