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31 January 2018updated 24 Jun 2021 12:26pm

Six of the nine biggest banks have missed the government’s Open Banking deadline

The CMA issues directions for those who missed 13th Jan deadline – delays published here

By Augusta Riddy

On 13th January the rollout of Open Banking – the government plan to use shared data to increase competition and deliver better customer experience to UK current account holders – began with a controlled testing period before it goes live to consumers in March. But despite having been issued with guidelines for implementation in August 2016, most of the biggest high-street banks have asked for an extension for putting in place the necessary regulation and infrastructure to enable Open Banking.

Six of the UK’s largest current account holders have now been issued with new directives and implementation dates by the Competition and Markets Authority (CMA), which marks the first step in sanctions applied to the banks by the Authority. Failing to comply with the directives, the CMA could seek a court order to force them to do so. Reluctance from the banks to jump on board could stem from potential losses in profit; the Bank of England predicted the largest lenders could lose more than £1bn by 2023.

Open Banking uses Application Programming Interfaces (APIs) to allow individuals and businesses to share their financial data with third parties. It’s expected that this will crack open the consumer banking market, increasing competition. The initiative follows findings by the Competition and Markets Authority (CMA) in 2016 that the major high-street banks do not compete hard enough for their customers. Read more about what Open Banking is here.

The trial period will go ahead with three major banks and a larger number of regulated third parties, which may include “challenger” banks such as Monzo. Participating banks will test the technology and their ability to practise Open Banking safely, and the Financial Conduct Authority (FCA) will begin publishing approved institutions on its register.

The banks that are not yet compliant are as follows:

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  • Bank of Ireland
    • Delayed date for account info functionality – 3rd August 2018
    • Delayed date for payments functionality – 7th September 2018
  • Barclays
    • Delayed date for all functionality/customers – 7th February 2018
  • HSBC
    • Delayed date for payments functionality for HSBC personal current account (PCA) customers & business current account (BCA) customers – 28th February 2018
    • Delayed date for account info and payments functionality for First Direct and M&S Bank PCA customers – 30th April 2018
  • RBS
    • Delayed date for BCA customers who use the RBS Bankline platform – 12th February 2018
  • Santander
    • Delayed date for ~40k Cater Allen BCA customers – January 2019
    • Delayed date for ~12k Santander corporate banking platform BCA customers – 7th May 2018
  • Nationwide Building Society
    • Delayed date for account info functionality for PCA customers – 21st February 2018
    • Delayed date for payments functionality for PCA customers – 28th February 2018

The Open Banking Implementation Entity (OBIE) is funded by the nine largest current account providers on the instruction of the CMA. Imran Gulamhuseinwala, Trustee of the OBIE, said the rollout was “a major step towards giving the customer real ownership and control of their finances and data.”

“The UK is the first nation in the world to launch Open Banking and many other countries are looking to our example. We should be immensely proud to be leading the revolution in retail and business banking because it means that UK customers will have more choice about how they manage and move their money.”

The 13th January was also the deadline for implementing the Second Payment Services Directive (PSD2) issued by the EU, which overlaps with Open Banking and allows customers to pay directly from their accounts, circumventing third parties such as Visa. Read more about PSD2 here.