Open banking regulations recently passed across the UK were designed to spur innovation and loosen the grip of a handful of legacy banks from the country's financial system. The new rules forced large banks to open up their consumer data through secure APIs, giving app makers and other banks access to information that could then be used to create any number of useful financial services.
In response to the changes, Barclays has rolled out an update to its mobile app that allows you to view accounts you may have at other banks, including Lloyds, Halifax, Bank of Scotland, RBS, NatWest, Nationwide, and Santander.
HSBC released its own app, known as Connected Money, in May to provide similar access to other bank accounts users may have, but there are key differences between the two.
The Barclays app allows you to sign in to your other bank account and link it to your account on the app. The bank is still adding features and banks to the service, which is missing notable financial institutions like M&S Bank, Tesco Bank and HSBC.
As of right now, the six million users of iOS and Android versions of the Barclays app will only be able to access checking accounts between banks, but the bank plans to continue updating the app to add features.
UK Magazine Which? describes the differences between the Barclays app and the HSBC app succinctly in its article on the open banking regulations. HSBC created a standalone app separate from their main banking app to facilitate access to other bank accounts. Their app gives you access to mortgage, savings, and checking accounts at 25 banks while providing helpfu tools like calendar payment reminders. But its app is only available for devices running iOS 10 and above, and HSBC's app doesn't use open banking APIs to access other accounts. They "screen-scrape" data by using your provided login information to simply pose as you while taking information, and the magazine compared the Barclays app's use of APIs to accessing Uber through Google Maps or using Facebook to log in to another website.
"Sharing your data via APIs is more stable and more secure than screen-scraping because the provider doesn't need to store your login credentials (which could be leaked)," Which? wrote in their explainer.
"You can be more selective about exactly what information is being shared and for how long, and you can more easily withdraw consent if you change your mind."
Public polls on open banking have been mixed as the UK weighs the benefits of greater access to banking information -- for the purposes of financial innovation -- against the potential security dangers associated with open banking.
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