So what is Open Banking anyway?
In one sentence…
It’s a set of reforms that allow you to securely share your financial data from your banking transactions, such as your spending habits and regular payments, with authorised providers (such as Bippit) that provide tools to give you more clarity on your finances and save you money.
How and why did it come about?
On 13th January 2018, the reforms came in as part of legislation put forward by the Competition and Markets Authority (CMA) alongside the catchily named “Second Payment Services Directive” (PSD2). The aim was to bring more competition and innovation to financial services, by allowing consumers to have ownership of their financial data. So information on your banking transactions like bills, meal deals and pumpkin-spiced lattes (the bare necessities), you now own, not the big banks!
So how does it work?
The data is connected through what’s called an API (Application Programming Interface). In simple terms, this is a secure web-based tool which allows the authorised provider to access the banking data directly, without you having to tell your password to anyone. Here’s how it works in 3 steps:
- You give the app (authorised provider) access to your financial data
- The API tool gets the data from the bank
- The data is sent directly back to the app you’re using.
Here’s a diagram by medium.com to explain APIs visually:
Awesome, makes sense! What kind of accounts can I connect?
You can connect any account you make payments from, which are current accounts, credit cards, prepaid cards and most high street savings.
With Bippit, you can connect your current account or credit card, and we’ll summarise your spending patterns from the data and display them nice and neatly for you, giving you more clarity on your finances. We can then put you in touch with one of our friendly financial experts who can give you a helping hand with achieving your financial goals in life.
Can you show me how it works?
It’s very simple. Choose your bank, you get taken to your bank and use touch ID access to grant permission…
..Then the API processes this request and connects your account with Bippit. Nice and easy.
Sounds great, but seems like a lot of data to be sharing. Is it secure?
Bippit is regulated by the FCA and we’ll only connect the data needed for the service you’ve signed up to. So if you’ve just connected the one account with us, we’ll only be able to summarise data on that account and nothing else. You always need to give us permission first.
When connecting your accounts with Bippit through Open Banking, you don’t need to enter any passwords. We just direct you to your banking app on your device, which is where you would give permission. We will never share any of your data with third parties and use the latest cybersecurity to ensure your data is safe.
Phew! How do I get started?
Simple! Just talk to your employer about Bippit as a new perk for the business, and you can connect your accounts in minutes. Once you’ve done this, you can set up your financial goals, track your budget, or connect with your advisor to get expert guidance straight away.