Whereas Open Banking applies to payment accounts (such as current accounts), Open Finance could ultimately mean that savings banks and building societies, insurers, investment managers, consumer credit companies, business lenders and mortgage lenders would have to implement similar interfaces and procedures.
Open Finance has the potential to transform the way consumers and businesses use financial services. It could make it easier to compare price and product features and to switch product or provider. It could help widen access to advice and support in decision-making. It has the potential to spur innovation and development of new services, increase demand and improve efficiencies for businesses.
Open Finance would build on the Open Banking principles of allowing TPP access. TPPs would be able to access customer accounts in order to:
- Collect the customer’s financial data, to present it to the customer (‘read’ access); and
- Carry out or initiate transactions on the customer’s behalf, such as initiating payments, switching accounts, making an investment or applying for credit, including obtaining the necessary permissions to do so, and presenting data back to the customers (‘write’ access).