You may have heard the term ‘Open Banking’ as part of payment industry changes. Tesco Bank is not currently involved in Open Banking, but we have a plan to be part of Open Banking in the future.
Here are the key things you need to know about Open Banking:
It is a Government initiative to improve competition in the UK by opening up the information that banks hold about their services and customers.
Currently, only current accounts are included and only nine biggest retail banks (and a few others) in the UK are participating on request of the Competition and Markets Authority (CMA).
With a customer’s explicit consent it allows companies access to information about the banks’ current account products and services (e.g. products, interest rates, branches, ATMs etc.) and from January 2018 it will also allow companies to access 12 months of transactional data and initiate payments in the UK only, using Application Programming Interface (APIs) to access this data.
Another change impacting the payments industry is the Second Payment Services Directive (PSD2), which is a piece of EU legislation that all payment account providers within the European Union must comply with from the 13th January 2018 onwards.
For Tesco Bank this impacts our Personal Current Accounts, Credit Cards, Internet Saver Accounts and Instant Access Savings Accounts. PSD2 provides a legal framework which aims to keep customers safe and secure and creates the opportunity for companies to offer new payment and/or account information (aggregator) services, which customers with a Tesco Bank online payment account can choose to use.
These new services are collectively called Third Party Providers (TPPs).
From January 2018 there will be authorised third party providers (TPPs) who offer two types of services:
Account Information Service Providers (AISPs)– Also known as aggregators, these are companies that allow you to see a consolidated view of your different financial accounts (e.g. money management tools)
Payment Initiation Service Providers (PISPs) – Companies who can initiate payments from your online payment account on your behalf (e.g. an alternative to using your card to make a payment online)
These services may be offered by new apps, or even from larger financial service providers. You may have seen these services available already, but from January onwards these services will be regulated by the Financial Conduct Authority (FCA).
TPP services work by accessing your online banking using your Tesco Bank security details, so you should always ensure that a company is authorised by the FCA, or another European regulator, to provide these services. You should also do your own research to ensure you are comfortable the company is legitimate.
The TPP should explain what services they are providing you and how they will use your data. You will need to give explicit consent for the TPP to act on your behalf as we’ll take any instruction from them being instructed by you.
With the changes in the law, you may be offered new financial services to give you more choice and control over your finances. This could be with your bank or another Payment Service Provider, but will require you to share your Tesco Bank online banking security details.
These services are designed to help you with your finances, but before choosing to use them, make sure that you understand the service and that you are happy with who will be providing it to you.
Remember, if you share your online banking security details with a TPP:
1.Both AISPs and PISPs will be able to see and access all the accounts that appear on online banking, not just the ones you give consent for.
2.We will treat all instructions as you having given consent for the TPP to act on your behalf, so inform us if you believe your details have been compromised and contact us immediately if you have any concerns.
3.Tesco Bank will have no control over how your data is used, which is why you must ensure you only ever deal with authorised TPPs.
4.Both AISPs and PISPs will have access to your accounts to act on your behalf. If you wish to stop using a service, you will need to update your security details with us.
For further information on how to keep your accounts secure, visit tescobank.com/security
Nothing will change in the relationship you have with Tesco Bank. You will still able to manage your accounts with us as you always have done.
The new services offered by authorised third party providers are additional ways to view your accounts and make payments, but it will have no impact on how you manage you account with Tesco Bank directly.
From January 2018 there may be an increase in the number of companies offering these new services, and you may wish to use them, but it is completely your choice whether you do so.
If you do choose to use these new services you should ensure that the provider you use is authorised by the FCA , or another European regulator, to provide these services. You should also do your own research to ensure you are comfortable the company is legitimate.
If you would like to know how to keep your account secure, see more information here.
You are in control - if you don't want to use third party providers, you don’t have to. If you don’t want TPPs to access you account, you don’t need to do anything.
These services will be available to Tesco Bank Current Account, Credit Card, Instant Access Savings Accounts and Internet Saver customers, but it is your choice whether or not you use them.
If you do wish to use a TPP you will have to share your online banking security details to allow them to access you account. Before you use a TPP you should check with them that they are authorised to undertake the services for you, that you trust them with your account, and you are clear what accounts they have access to and what they are using your data for.
To use these new services you will have to share your Tesco Bank security credentials with an authorised third party provider.
But before you share your details, you should always ensure that a company is authorised by the FCA, or another European regulator, to provide these services and you should also do your own research to ensure you are comfortable the company is legitimate.
This is because there may be third party providers who are not authorised who ask for your online banking credentials, or fraudsters pretending to be one of these services in order to gain access to your bank account.
For further information on how to keep your accounts secure, visit tescobank.com/security, or takefive-stopfraud.org.uk.