Banks have committed to explore the expansion of open banking into the savings market, the City watchdog revealed yesterday.
In its report on the savings market, the regulator confirmed that banks and building societies have committed to explore how investment in open banking can be used to support savings customers.
This includes carrying out a review to report back in 2024 on the scope and opportunities for open banking capabilities to help customers make their money work harder.
Most savings products are currently outside the frameworks for data sharing and requirements.
The report noted that opening up savings data has “the potential to bring consumers up to date and personally relevant information to enable them to make active switching decisions”.
Speaking to reporters after the release of the FCA’s report into the savings market, Sheldon Mills, executive director of consumers and competition at the FCA, said “we have asked the banks to look into the expansion of open banking into the savings market”.
Launched in 2017, open banking is an attempt to boost competition in retail banking by forcing high street lenders to open customers’ data to trusted third-party firms.
The scheme entered a “new phase” in January this year after the six largest banks in the UK implemented the requirements of the open banking roadmap. In April, regulators announced a new long-term regulatory framework would be established to “unlock” its potential.
Since its launch, it has garnered over 7m customers of which 750,000 are small or medium-sized businesses. However, so far it has only applied to a few financial products – particularly current accounts.
Regulators are currently considering the next steps in open banking, determining what form a new regulator will take and which products should fall under the open finance remit.