Authorised Online Third Party Provider Access

Bikerking49

I have been recently getting letters from my bank highlighting new terms and conditions. One of them talks about Authorised online third party provider access, which is due to start in January 2018. Call me sceptical but I don't like the sound of this as it gives authority for 'reputable' companies to access your bank account and take money from it. It sounds well dodgy to me, does anyone else share my concerns or can explain why I should give any company authority to take money out of my account?

eskbanker

It refers to the introduction of the Open Banking regime, under which banks have to open up access to their accounts to (FCA-approved) third party apps but only at the explicit request/consent/authorisation of the account holder, so it doesn't give any authority to such companies unless you ask them to.

While it's only natural to be sceptical, all banks will be amending their Ts & Cs in the same way so there won't be much point in trying to avoid it altogether, and ultimately if there is any financial loss that the customer isn't responsible for then the bank is on the hook, so it's in their interests to ensure that all safeguards are adequate!

Uxb

..and don't forget that its an EU instigated 'improvement' for customers under the snappy title of the Payment Services Directive No 2(PSD2); effective from the beginning of 2018.

I suspect Hutbur's law will apply
"Any much announced improvement in service masks an actual deterioration in it for customers"

eskbanker

Uxb wrote: »

..and don't forget that its an EU instigated 'improvement' for customers under the snappy title of the Payment Services Directive No 2(PSD2); effective from the beginning of 2018.

I'm normally as cynical as the next person but in this case I'm not sure that improvement needs to be in quotes there - it's an entirely optional facility that many people will welcome but that can readily be ignored by everyone else!

Uxb wrote: »

I suspect Hutbur's law will apply
"Any much announced improvement in service masks an actual deterioration in it for customers"

And one of the other measures coming in is also a step in the right direction as far as I'm concerned, i.e. the new obligation on banks to publish service stats, as trailed at https://www.moneysavingexpert.com/news/banking/2017/07/banks-to-be-forced-to-publish-service-data-under-new-plans-from-regulator, which has to increase transparency and ultimately improve service.

djpailo

The problem with these third party services is one of them will be hacked. Its not a question of if, but a question of when. That puts every single account you own at some sort of risk. I really don't think the risk is worth the reward of seeing all your accounts in one place. I don't really see the benefit in it either. Most people who are operating several accounts will have their own way of organizing it all, why should they suddenly now need a third party to do this for them?

Also, how long before these banks start putting "opt-in" as the default?

eskbanker

djpailo wrote: »

Also, how long before these banks start putting "opt-in" as the default?

Why would they though? I'd have thought they'd prefer to retain direct control of their customers' interactions with them, via the systems, portals and apps that they write and manage.

Also, my understanding is that customers will effectively be saying to each of their banks 'I authorise you to grant access to my account(s) to third party App A', not 'I authorise you to grant access to my account(s) to all third party apps' so I'm not sure that any such opt-in default would actually be viable anyway?

djpailo

eskbanker wrote: »

Why would they though? I'd have thought they'd prefer to retain direct control of their customers' interactions with them, via the systems, portals and apps that they write and manage.

Also, my understanding is that customers will effectively be saying to each of their banks 'I authorise you to grant access to my account(s) to third party App A', not 'I authorise you to grant access to my account(s) to all third party apps' so I'm not sure that any such opt-in default would actually be viable anyway?

Unfortunately, whilst I agree, something in the back of my mind says common sense is often lacking these days. The banks may want customers to participate because it gives them more details about their customers, which may be useful. Anyway, I'm glad it is an opt-in service, and nothing will change for me. Good luck to those that do find it useful.

Uxb

I'm with you @djpailo
It will be just like paperless statements where the wording and the options mysteriously metamorphises over time.
First doing paperless was optional and a new thing to benefit customers.
Then there were incentives to swap to paperless.
Next along came the default position of paperless
Finally already arrived in many cases it paperless by compulsion if you want the account opened.

EachPenny

eskbanker wrote: »

Why would they though? I'd have thought they'd prefer to retain direct control of their customers' interactions with them, via the systems, portals and apps that they write and manage.

I'd generally agree. But I can see a scenario where a beancounter looks at the cost of developing and managing those portals and apps and asks why the bank is paying for that when the third party is doing it on their behalf for free.

Could we be heading towards having new challenger banks which not only don't have branches, but also don't have their own online/mobile/phone banking?

Whilst I don't see this change as a massive threat, I do think there is some valid concern about the potential for an opt-in to become an opt-out. The right time for society to consider the implications of that would have been before now, not at some point in the future when an unwitting person discovers their account has been accessed by a third party.

The other issue for me is when the banks pick up the bill for any fraudulent or mistaken transactions, will that bill be passed on to shareholders, or will it fall on customers? Either way some of us will lose.

Uxb

EachPenny wrote: »

Whilst I don't see this change as a massive threat, I do think there is some valid concern about the potential for an opt-in to become an opt-out. The right time for society to consider the implications of that would have been before now, not at some point in the future when an unwitting person discovers their account has been accessed by a third party.

It's an EU Directive - and you should by now know how they work!
There is no discussion allowed, no vote in parliament, no point in writing to your MP or doing anything else for that matter: and no you cannot vote the commission out either.
The EU imposes these things on its member states and they have no option other than to comply and change their regulations and laws to match.

robatwork

Uxb wrote: »

It's an EU Directive - and you should by now know how they work!

And this is an EU Directive that has banks jumping through hoops opening things up safely, while GDPR is another EU Directive that has just about everyone including banks jumping through hoops closing things down safely.