PSD2 Open Banking
The complementary regulatory initiatives of PSD2 and Open Banking have paved the way for UK businesses and consumers to create and adopt new financial products, based on analysis of account and transaction data in real-time.
The Second Payments Services Directive (PSD2) became effective across the EU and its member states on 13 January 2018. The legislation updated the original directive (PSD) adopted in 2007 and was designed to create a single market for payments, to improve security and fraud prevention and encourage innovation and competition.
Open Banking, launched in 2018, by the UK Competition and Markets Authority (CMA) on behalf of the government, was the UK’s response to implementing PSD2 in a practical and effective way.
Today, millions of UK customers are using Open Banking, choosing to share their financial data securely with financial organisations in order to take advantage of better, uniquely tailored products and services.
Visible Capital is one of the pioneers of this new eco-system of FCA-regulated third party providers, who use Open Banking technology to create new and improved financial products. Already over 135 million calls a month are being made using Open Banking API’s by customers allowing access to their data, to review their income and expenditure across their bank accounts, line by line, and use this unprecedented level of financial insight to access the products and services that best suit their needs.
Open Banking is designed to put the customer in control of their data and to keep them in control throughout the data sharing process. The log in process uses 256-bit encryption - significantly more secure than the better browsers people might use at home to log into their online bank accounts, which connect at 128-bit encryption.
And our customers know exactly what we do with their data when we view it. They know that our powerful “reg tech” software is “read-only” and that it simply reviews the account information, creates a report and then automatically deletes the log-in details.