Open Banking - a good or bad idea?

Faust

I have received various circulars and emails in the past week from those I bank with.  In essence the circulars/emails concerns the roll out of 'Open Banking'.  This is a new banking service whereby you will be able to register all your bank accounts and be able to access them through one app on your tech devices.

The one 'huge fly' in the ointment, for me at least, is that these new services will be offered and run by some third parties.  In order to use this service (and this is according to the literature I have read) you will probably have to provide your banking details and passwords to this third party organisation.  There are then lots of soothing words about these companies have to abide by all current banking regulations and are subject to the regulators scrutiny.

Now I don't know about you but there's no way I'm about to give some third party full access to my bank accounts no matter how well intentioned they may be.  With almost daily reports concerning data breaches I think this is a huge accident waiting to happen.

These are just a few of the items I have copied for your perusal - note the last bullet point about you being responsible not the banks.

New digital banking services are entering the market offered by us and TPPs. These will include new ways to pay for things online and tools that help you to view all your accounts with different financial providers in one place. Before giving a TPP permission to access your account information you may wish to check that they're authorised by the Financial Conduct Authority (FCA) to provide their service.
•     Some TPPs might ask you for your online banking log in details and password to provide their service to you. If you decide to give them this information, this means that they'll be able to see and do anything you can do on your accounts.
•     If you give TPPs permission to access your accounts and account information, we're not responsible for what they may do.

Pacifico

I'm with you - sounds as bad as Amazons new delivery scheme where by you allow them to enter your house if you are out.

Pacifico

I believe disclosing your password to a third party would breach your terms and conditions of using online banking.

rancidpunk

Anyway, all my banks give me electronic gizmos that generate random numbers when I need to log in or do a transaction - how is this system proposing to get round that?

IronGiant

I already access all my accounts through one app, that of my bank.

Other than a tenuous economy link, shouldn't this be in general chat?

Jezza99

Probably and I'll move it if it's OK with @Faust.
Regarding the topic, if the banks won't take responsibility for a third party they are presumably recommending, not a chance.

IronGiant

I can't see how any bank would recommend a third party service that they don't consider secure. I fear there has been some misunderstanding somewhere along the line.

Faust

More along the lines of "with the rise of third party banking apps, please be aware we won't take take any responsibility if you use one and get robbed" ?  Seems more likely now you mention it.

Faust

I have information from another bank and is as follows - If a service asks for your full security information, it's because the way they provide their service is to log in as if they are you.  And of course, this means the service can use your online banking system in the same way you do, for example: seeing all your accounts under that login and potentially transferring money.

I think this is a ridiculous risk and can't understand how it's ever got past the regulator.

Jezza99

I thought given banking was part of the economy this section was the most appropriate, but will leave it up to you to decide the best place.