HSBC moves into open banking (2024)

A Finextra member 28 September, 2017, 09:410 likes

They should try Afterbanks

A Finextra member 28 September, 2017, 10:360 likes

Opening Banking means that third parties can connect to banks' backends via API. Surely, a bank can be such a third party in respect of other banks, but one would expect such a bank to play ball (i.e. open upits own backend too within the same solution).

Paul Love - Konsentus - Nottingham 28 September, 2017, 12:490 likes

First Direct (HSBC) offer a similar service via old fashoned account aggregation for the past few years. Sadly it was tied to IE/ActiveX and I can no longer use it.

I guess they did not invest in this as "screenscraping" looks to be banned in the new world.

I wonder how many of their custemr used "Internet Banking Plus" and how many will use the new service?

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 28 September, 2017, 19:320 likes

My bank introduced this kind of online aggregation portal around 8 years ago and shut it down around 6 years ago for lack of consumer uptake. IMO, until someone comes up with a "killer feature" for account aggregation, I have strong doubts if Open Banking / PSD2 will move the needle on driving mainstream adoption for PFM / MoMMA technology, especially when it requires customers to share their online banking credentials with third parties.Innovative Fintechs Don’t Need No PSD2 Regulation

A Finextra member 28 September, 2017, 19:592 likes

I think I'll disagree with Ketharaman. Just because something didn't work in the past doesn't mean it won't work in the future. iPod was not the first MP3 player out there, and iPhone - not the first smartphone. PSD2 does make some things easier to implement - not that guarantees success per se. It's not about "what", it's about "how".

James Piggot - Finastra - London 29 September, 2017, 07:231 like

I have used the Moven app for the past year that aggregates bank accounts and credit cards across banks. It monitors spending and categorises transactions

But why not take it further, show total assets including current valuation of your property and up to date value of pension funds and other investments?

Rajesh Tiwari - Wipro Ltd - London 29 September, 2017, 07:230 likes Great and all bank across U.K is doing it, isn't it a bit too early to announce ? I must admit that it is good initiative from the regulators and will bring superb customer experience

A Finextra member 29 September, 2017, 09:050 likes

Fascinating move, and shows HSBC stealing a march in the data collection game...easy to personalise offerings to customers where it has access to all their financial data...

Ralf Ohlhausen - Pay Practice - Stuttgart 29 September, 2017, 09:331 like I bet they use screen scraping like 99% of similar apps. It is incomprehensible that EU regulation seriously considers banning such technology. PSD2 was not build to ban it, but to improve its security by requiring licensing/supervision, audits, identification towards the banks and strong customer authentication. APIs may take over over time, if they work well, but the world has not yet seen one offered for free to competition. This is a completely new concept and it is questionable - to say the least - that banks will make it easy. Elevators were build in addition to staircases not to replace them - same here. If regulators want to start banning successful technologies, which have risk elements, they should better put their eye on nuclear power or AI.

A Finextra member 29 September, 2017, 13:041 like

Hi James, something like Microsoft Money but with automated data, and that works on a smartphone then. I too want that, but how many others are really that interested?

Moven are not telling me that by movingcredit card with provider X to provider Y I would be Z pounds a year better off based upon my usual behaviour. That would really add some value.

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 29 September, 2017, 19:030 likes

@AlexanderPeschkoff:

I don't disagree - as I've acknowledged with the "killer feature" part of my comment.

That said,

1. The same Apple of iPod / iPhone fame killed Newton 20 years ago and never reentered PDAs probably because it couldn't find / there wasn't a killer feature in that product category. So passage of time is no guarantee of mainstream adoption.
2. Furthermore, technology changes rapidly and Finsurgents make 5 year rolling forecasts of death of branch, plastic, cash, etc. So passage of time is not a luxury that technology can expect either.

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 29 September, 2017, 19:221 like

@JamesPiggot, @AnonFinextraMember:

+1.

In my post Innovative Fintechs Don’t Need No PSD2 Regulation, I'd given another example of truly valuable money management tip that I look forward to getting from PFMs/MoMMAs: "Earn $$$ more by sweeping X amount from a checking account to a savings product."

Looking at all our wishlists, one common theme emerges about what consumers would find valuable: Tips to maximize ROI of portfolio aka bang for the buck.

With the passage of time, I'm realizing that tips alone won't suffice. With the constant dumbing down of branch and remote channel staff, executing a tip entails a lot of friction. Many times, I know I'll gain $$-$$$ by changing plans or $$$-$$$$ by changing providers but it's so painful to actually make the switch that I let the opportunity go by.

Perhaps the killer feature for online aggregation is fulfillment of tips (with consumer's approval, of course) related to products, plans and even providers such that switching banks stops being morepainful than the proverbial root canal surgery. If they supported that, PFMs/MoMMAs will easily be able to charge a percentage of gain / savings to users for using their service.