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In just one example of several measures outlined by the CMA in its 'Making banks work harder for you' report, the Competition and Markets Authority has demanded an open API for banks to share data.
"The reforms we have announced today will shake up retail banking for years to come, and ensure that both personal customers and small businesses get a better deal from their banks," said Alasdair Smith, chair of the CMA's retail banking investigation.
"We are breaking down the barriers which have made it too easy for established banks to hold on to their customers. Our reforms will increase innovation and competition in a sector whose performance is crucial for the UK economy."
Financial technology, labelled as 'fintech' by some, has seen notable advancements in recent years and this announcement will help drive it further. With prior consent, the API will allow third parties to access information about banks such their offered services, pricing, and usage.
Reforms aim to improve the consumer experience, and the API will enable customers to manage their bank accounts and financial holdings through a single app even if they use various financial providers. On the other side, lenders could assess credit scores and see if they can offer a better rate than a creditor being used currently.
"Our central reform is the Open Banking programme to harness the technological changes which we have seen transform other markets. We want customers to be able to access new and innovative apps which will tailor services, information and advice to their individual needs," continues Smith.
"This is backed up by a wide package of measures to improve the current account switching service, to make it easier for small businesses to shop around and open new accounts or get a loan, and to see how the quality of service provided by your bank compares with other providers."
All of the UK's major banks will need to provide their input on the API which must be completed between January 2017 and March 2018.
What are your thoughts on the CMA's demand for an open API for banks? Let us know in the comments.
