What is Open Banking?
Open Banking is a way of seeing all your accounts together in one place, wherever you bank.
It allows you to share information safely with third party apps and websites offering services such as:
- sharing your account information
- making payments
- setting up automated Variable Recurring Payments (Sweeping payments)
- budgeting tools
- helping you to manage your money
- comparing prices to help you shop around
You can check which third parties are regulated or authorised to provide Open Banking services in the UK by searching the Open Banking website and the FCA Register.
Sharing your information
By sharing your information securely with a regulated app or website, you can do things like connect your accounts and view all your balances and transactions in a single place. Plus, you can use product comparison sites to check if there’s a more suitable account for your lifestyle.
Making payments
With Open Banking, you can send money between your accounts or pay others, including friends and family, using these apps or websites in just a few steps.
For both UK and international payments, you can:
- make an immediate payment
- set up a future-dated payment
- set up a standing order or recurring payment
To use Open Banking, you’ll be asked for your consent by the app or website before being redirected to HSBC for authentication.
The third party can ask you for the sort code and account number of where the payment will come from, or you can select those details after the authentication process and confirm the payment to be made. You’ll then be returned to the app or website.
For all immediate payments, you can’t recall or amend them once they’ve been made.
If you‘re sharing your online banking details with a third party, they’ll be able to make payments from your account in the same way, as if you were logged on to online banking directly.
How sweeping payments work
You can set up instructions with a third party to automatically move funds (sweep) between your own accounts.
You will set the parameters for the sweeping payments via the third party app / website eg frequency of payments (daily/weekly/monthly) and payment limits (maximum amount transferred per month / maximum amount transferred per sweep). We’ll ask you to complete security once during set-up. Once agreed, there is nothing further for you to do.
The third party will use these parameters to check your account and automatically move funds without the need for you to authenticate each payment/sweep. You can cancel the instructions at any time.
Please note: The third party may need access to some of your account information to enable them to determine whether a sweep can be made.
How card-based payment instruments work
A third party may issue you with a card that you can link to your payment accounts.
You can make payments with that card and the third party will ask us for confirmation that you have the funds in your account.
We’ll only respond with a ‘yes’ or ‘no’ answer. If the third party wants to access the funds in your accounts, they’ll need to make separate arrangements with you.
If you experience a problem with one of these cards, get in touch directly with the third party which issued the card.
How does Open Banking work?
Using Open Banking
Open Banking works by enabling financial institutions to share account information and make payments through APIs (application programming interfaces). This means you can safely allow access to your data and make payments without needing to share your log on details.
Apps and websites will need your consent to access your HSBC accounts. It’s important you understand the services they’re providing and how they’ll use your data.
To access your account for information sharing, to make a payment or set up sweeping payments they’ll ask you for your consent and you’ll be securely redirected to HSBC's authentication process. This will be similar to the way you log on to online banking. If you’re using the HSBC UK Mobile Banking app, you’ll be able to use face or fingerprint recognition to authenticate it, where available.
If you’re having trouble authenticating, make sure you follow the on-screen instructions on how to generate the security code.
Once authenticated, you can select the accounts you want to share or make a payment from. The app or website will ask you for your consent for them to access your account data either as a one-off, or for a period of time, such as 2 years. They will ask for your consent every 90 days to carry on accessing your data.
Sharing your Online Banking details with authorised third parties
This is another way for third parties to access your accounts or make payments. Unlike with Open Banking, you may need to share your log on details with the service provider to allow them to access your accounts.
They’ll need to identify themselves to us and we’ll check that they are certified to provide third party information or payment services. They may then access your accounts by logging on using your online banking security credentials. They’ll need to request this information from you each time, which they’ll share with us.
They’re only legally permitted to access screens and information for accounts that you’ve given consent to. They must comply with data protection laws, payments law and must be registered or authorised with the Financial Conduct Authority (FCA).
If you’re concerned about the data you’ve shared and feel it may have been used incorrectly, or if you’re concerned about any payments made through third parties, get in touch with them as soon as possible.
Need more help?
You can find out more about how Open Banking works from the body set up to implement it in the UK.
The MoneyHelper also has its own guide to Open Banking.
Visit the Open Banking website for more information. Give us a call if:
- you have a technical problem with sharing your information or making payments
- you believe a payment was taken from your account that you (or another account holder) didn’t ask for
- an app or website has accessed information through screen scraping that they shouldn’t have
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