Open Banking

Open Banking is specifically designed to make banks work harder to earn their keep.

That’s what Chris Michael said when we asked him to give us an intro to the topic for our Open Banking Breakfast Briefing. Chris Michael is the CTO of Open Banking, a limited company set up by the Competition and Markets Authority last year with a specific remit: to build a set of API standards around retail banking that will give consumers and businesses control of their finances.  

The organization is funded by the CMA 9, the nine largest retail banks that trade in the UK. Open Banking enables personal customers and small businesses to share their data securely with other banks and with third parties, allowing them to compare products on the basis of their own requirements and to manage their accounts without having to use their bank.

The initiative is all about opening up banking, increasing competition between banks and providing a level playing field and lower barrier to entry for FinTechs to create products and services that sit on top of banking and will provide a lot of utility and value to consumers.

Why should banks care?

Because any API is only as good as the underlying platforms and technologies.

Open Banking is technology agnostic. The team is just creating the API standards - it’s up to banks how these are technically implemented.

And there are better and worse ways of doing this.

One of the challenges that Chris has seen, for example, is that, when pulling a list of transactional records, you ideally need a unique ID for each transaction. For many banking systems this concept simply does not exist, which would make it very difficult to use APIs in this case. Another issue is the lack of real-time updates to transactional information. In some instances payments are updated in a batch process once a day - not in real time! Plainly, if you want real-time APIs and the underlying system is incapable of delivering this, then there’s friction there.

Many banks have a long way to go - in terms of the maturity of their technology, processes and in-house skills - to pragmatically respond to this regulation and fight off the competition. And they aren’t sure how they go about increasing their maturity.

In the video below, Chris Michael explains the commercial context of the Open Banking initiative, including PSD2 and GDPR, as well as the work that he has been doing towards making a set of API standards available to banks.

What Chris covers:

  • API Dashboard - list of endpoints with real-time information on availability and performance
  • Read/Write APIs
    • Security profile - how APIs are secured
    • Account and Transaction API - access to account info, balances and transactional history
    • Payment Initiation API - initiation of payments from personal/business current accounts
  • Security model - new trust framework
    • Demo of how APIs are secured
  • Live demos
    • Account Information API - how this could work in a business context
    • Payment Initiation API
    • Authentication and Authorization
  • Working Open Banking Roadmap


If you want to know more about what you can do to respond to Open Banking, check out the other videos from our session.