How an Open Standard API Could Revolutionize Banking 72
An anonymous reader writes: Open bank data will give us the freedom to access all banks in real time and from a single view, automatically calculating the best deals in complete transparency, which will be a significant step forward for social good and give people more control over their finances. Meanwhile, financial tech incubators, accelerators, and startups are creating a more experienced talent pool of developers ready to act upon these newly available assets. From the article: "The United Kingdom government has commissioned a study of the feasibility of UK banks giving customers the ability to share their transactional data with third parties via an open standard API. First mentioned alongside the autumn statement back in December, the chancellor has now outlined plans for a mandatory open banking API standard during the recent budget in March."
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beta really annoyed a lot of people.
Re:Sounds good to me (Score:5, Interesting)
I feel your pain... I left my previous bank because they "improved" the UI with a brain dead design, that required pixel hunting and clicking "next page" until all the records had been displayed for the selected month before being allowed to save as CSV. Btw, the bank I'm talking about is the CGD of Portugal (Caixa Geral de Depositos). Fuck you CGD, please slowly die in a fire.
I made a small script with xdotool to dump all my data before I switched to another bank. It was ugly, but did the job.
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My bank gives me a simple "export" button that lets me pick from several export formats (including csv and what I think is some sort of Quicken format).
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Bank of Queensland.
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Barclays in the UK offer a range of options.
Re:Sounds good to me (Score:4, Funny)
An OAuth2 + REST API to just grab this data would be very useful.
Yeah, the banks are going to allow this. And big pharma will make make medicine freely available for the good of all mankind, the music industry will distribute MP3s of all their artists for free over BitTorrent, and Microsoft will cede the desktop to Linux. Any minute now.
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the chancellor has now outlined plans for a mandatory open banking API standard during the recent budget in March
Reading comprehension fail.
No, I read it all right. Do you think the banks are just going to stand by and let him do that?
LMAO (Score:5, Insightful)
Does the author serious thinks banks are going to adopt anything that is "a significant step forward for social good and give people more control over their finances". Most of the money they make is off people who can't control their finances effectively.
Keep in mind their entire business is moving numbers from one pile to another. Anything that keeps them in control of the access to these piles and information about them is a good thing to them.
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the chancellor has now outlined plans for a mandatory open banking API standard during the recent budget in March.
I presume you know what "mandatory" means?
Re: LMAO (Score:1)
Yes. It means the little folks have to do it and the big corporations and their rich CEOs/paid off politicians can ignore them.
Re:LMAO (Score:4)
*Actually, it means "tell me the rules, so I can get around them".
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the chancellor has now outlined plans for a mandatory open banking API standard during the recent budget in March.
I presume you know what "mandatory" means?
I presume you know what "plan" means?
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I presume you know what "plan" means?
Well, what you plan and what takes place ain't ever exactly been similar. ;)
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the chancellor has now outlined plans for a mandatory open banking API standard during the recent budget in March.
I presume you know what "mandatory" means?
The best laid plans of mice and men often go awry
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Re:LMAO (Score:4, Informative)
Actually the UK government has forced banks to do things for the good of the customer many times.
A similar example would be the "faster payments" system. It used to take about three days to make transfers between accounts, the government (well, regulator, but same thing really) told all of the banks in the UK to sort it out.We can now transfer money between accounts in less than 90mins, typically it's moved as fast as you can logon to another bank and check to see if it's there.
Other examples include making it easier to move accounts by moving DirectDebits (a system to allow bills to be paid directly electronically from bank accounts, without cheques) between different banks, which never used to be possible.
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This will never happen. We can't even agree on a document standard, and mostly because companies prefer the lock-in vector to keep customers at their doors. Anything that makes your service more fungible is always going to be shunned. It's good to have choice as a customer, but it's bad for a vendor.
We've been playing this cat-n-mouse game for a long time now. You can't win this.
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Best deals? (Score:4, Insightful)
I can understand benefits of standard, open API for automatic processing of orders for companies and various home-budget tools. But I don't get "automatically calculating the best deals in complete transparency". Do you really need a program, querying 100 of banks in realtime for the best place to have your current account _today_? And tomorrow you are going to switch, because international transfers over there are half cent cheaper?
API for transactions - sure yes. But API for bank offers metadata? Isn't it bit too much?
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It's likely one API for UK government to access/store bank transaction data about its citizens (big brother). Having one API for multiple banks appears useless for customers.
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Without commenting on your Government usage assumptions, if there's a single API that works with all UK banks then it becomes far easier to develop banking software designed for consumer use, and for consumers to switch bank accounts without having to change everything.
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Before the most recent crash, the financial sector of the US economy represented 40% of GDP one year (and I doubt the UK was too far off from that). Clearly a ridiculous figure. While most of that was probably fees on stock trading and the like, some part of that was consumer financial services.
And besides, banks are a good place to start to modernize because they're already heavily regulated so consumers have more of a chance of pushing what's good for us. But once we prove the possibility and utility of d
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Because I really want advertisers and the NSA/IRS knowing even more about my financial habits. Yay for openness!
You think they don't already?
Comment removed (Score:3)
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They will love it, because what they want is transparency and more competition, because that is what banks want: to give you the ability to compare.
Oh wait, they don't. They will fight this with everything they have and they have money.
Despite the paranoid occutard ring to it, this guy is right.
Here is what will happen:
Banks that think they can compete on both customer service and rates will do this. ("Rates" here is a generic term for "differences in fees, rates, periods, and interest that might cause a consumer to switch".) Because they can scoop up a wide variety of the people looking at that stuff.
The rest of them, the ones that compete on location, pain-in-the-ass factor, cute tellers, ATM networks, etc. who really don't have m
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Re: The banking industry will love this (Score:2)
Among the Many Big Questions (Score:2)
2. Security? Liability?
3. Will the "financial tech incubators, accelerators, and startups" be held to the same requirements and same standards? If not, why not?
4. How will API evolution and versioning work? Who's responsible?
5. How will compliance with the standard(s) (and service levels) be enforced?
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PositiveMoney has it all wrong. The video says "if we all paid off our debt, the current economic system would collapse". But if we all paid off our debt and stopped working because we didn't need to anymore, then the real economy (i.e. the thing that actually produces food, clothes, houses, cars, computer, electricity, clean water, etc.) really would also collapse because there would be no one doing the work to create all that stuff.
There is a big issue of inequality of both income and wealth distribution.
How this could be awesome. (Score:3)
Imagine that instead of having your shitty bank app or website, or in many cases, several shitty bank apps or websites, you had one unified app that accessed that consistent API across banks, and presented a nice interface.
Transfer from bank 1s savings account on the right day to pay your incoming card bill from bank 2. ... ...
Unified balance and tracking of upcoming bills - warning you if you're about to go into the red with a hypothetical purchase in a week and your forecast income,
And yes - security is an obvious issue, and there need to be strict permissions.
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Currently most non-routine transfers in the UK for personal accounts are authorised by 2FA - you get a PIN terminal, you stick your debit card in the slot, and it interfaces with a challenge-response app on the smartcard in your plastic.
I hope they keep that air gap in there. There's potential to use the NFC loop in your phone to cut the separate device out of the loop, but that would mean your phone might be running malware that takes the opportunity to run some other transactions. Better to have a simple
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Imagine that instead of having your .... several shitty bank apps or websites, you had one unified app that .... presented a nice interface.
Why do you assume that the unified interface will be nice? I have accounts at several [UK] banks; the Nationwide interface is good but the FirstDirect interface is bad. For example, to view up-coming payments with FirstDirect is a job of work - I think they want you to over-draw so they can charge you for it. As another example the Nationwide show your statement in what I would call correct chronological order - oldest at the top. Most banks however have latest at the top; and some (only some) of those
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I apologise for being unclear.
I was assuming that the API was sufficient to allow banking apps to do this.
So, for example, both existing banks apps could support other banks, and new providers, or open-source apps could be used.
In other words - a choice rather than 'pick bank, get app'.
Sounds like hype to me (Score:4, Funny)
Through a self-perpetuating ecosystem of developers, the banks will continue to gather high-value data from customers through third party integration.
I read the article but don't really understand what a "self-perpetuating ecosystem of developers" would do for me. It sounds like they're planning to breed.
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It sounds like they're planning to breed.
Developers don't breed. We spawn. And we swim in schools, preferring oceans of Mountain Dew.
How about "NO"? (Score:2)
Hmm, all banks with a common API so any flaw in that API means that the cybercriminals have instant access to all banking information for everyone everywhere. And we know d*mned well that there WILL be flaws in that API.
I prefer the bazaar to the cathedral, please.
How about proper support for OFX first? (Score:2)
How about proper support for OFX first? I have enough issues with my bank sending me broken OFX Files that are broken, or that every OFX Client for Linux remotely supports.
Banking Revolution? I think not! (Score:1)
There already is an open banking API: Bitcoin (Score:1)
Bitcoin is the open, decentralized and open-source banking API.
Despite what you may have heard, the technology is thriving and the number of developers, projects and startups in the space is exploding. 2015 is on track to be a $1b investment year for bitcoin, most invested in USD (not bitcoin) in more than 700 startups.
It's a lot more than a currency, it's the Internet of Money, or Money-over-IP (MOIP). Read the Satoshi Nakamoto whitepaper, every geek should.
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Finance::Bank (Score:2)
Other posters have already demolished the idea that banks will do this voluntarily or by edict.
The engineering approach is to not involve them. The Finance::Bank [cpan.org] collection is the closest you're going to find to a workable solution.
Anybody who has money to spend on a government "solution" should send it to these developers instead.
it exists, just not for the UK or AU (Score:2)
while the UK has their issues, this issue is all but settled in the US. the Open Financial Exchange [wikipedia.org] defines a way to interface with banks. the problem is getting software that can do this with ease.