WTF is Open Banking?

Emma Nunes-Vaz
October 6, 2022

Although having the best team ever is the key component to how Incredible works, another fundamental factor that allows us to exist is Open Banking. Once again, it’s an example of seemingly technical financial jargon that is actually quite simple to understand once explained; yet, as always, this information is often gate-kept and difficult to find. So, without further ado, let’s discuss WTF open banking is!

What is it?

Simply put, open banking allows you to share certain financial information (such as your transaction history, current balance, bills etc) with other authorised financial providers or services - such as us! 👋This data is shared through the use of APIs (Application Programming Interfaces), which provide a secure and safe way for data to be transmitted. Although this might sound scary to some, the most important thing to remember is that this can’t be done without your consent; whether or not you use open banking is fully in your control. 

Why would I want to use it?

You might be wondering why on earth you’d want to share this private information, but it actually has huge benefits - both for consumers and businesses!

Firstly, the information these providers and services can now have access to are read-only, meaning they can’t make purchases on your account. They also can’t sell this data, so it stays between you and the business you grant consent to. Instead, they use this information to offer you a personalised service to aid you with your financial wellbeing. Whether that’s money-saving apps who automatically put money into savings for you based on your transactions (e.g rounding up every purchase), financial apps allowing you to see all of your current account profiles in one place (even if all with different banks), apps that can compare products and services to find you the best deal; or even Incredible apps that allow you see to all of your borrowings in one place, simplifying your life by automating and optimising your repayments! 👀    

Is it safe?

If Incredible uses it, you know it’s safe! 😎Open Banking was launched in 2018 in response to the recommendations of the Independent Commission on Banking, which called for increased competition and transparency in the banking sector. As part of this initiative, strict security and data protection requirements were put in place to ensure that open banking is safe for both individuals and businesses. It uses the same encryption technology that banks have been using for years to keep your information safe!

Open banking has required large, established banks to be more competitive with smaller and newer banks - resulting in lower costs, better technology, and better customer service. If you have any more questions regarding open banking, we suggest heading over to https://www.openbanking.org.uk/

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