You might not have heard of Open Banking, but if you bank online, you’ve probably noticed some changes that are a direct result of it. For example, if you’re a Lloyds Bank current account holder with a Scottish Widows Pension Plan, you can now see the value of your pension in your online banking app.
This is because in January 2018 ‘Open Banking’ set out a requirement for UK banks to allow customers to share their financial information with other authorised providers, making it possible for consumers to gain a level of control over their financial data that has not been possible before. This has enabled providers and developers to move into new spaces with apps and websites that make it easier than ever for people to access, understand and monitor their financial information.
Is it safe to share financial information?
Open Banking providers need to be authorised and regulated by the Financial Conduct Authority and you have the choice to grant authorised third parties access to your data. In order to achieve authorisation, providers have to demonstrate that they meet strict requirements. Data is stored and accessed using the very latest forms of Bank level data security involving multiple levels of user identification and hidden ‘tokens’ to make the links between the various data connections. This makes it very difficult to break the link if you are not the owner of the data. You’ll never be asked to share passwords or login details with anyone other than your own bank or building society.
How is LEBC making use of Open Banking?
LEBC Group has worked with open banking authorised provider Moneyhub, to develop our Hummingbird app. Available soon, Hummingbird enables you to collate information from a wide variety of sources into one place with a truly holistic and accurate view of all your finances. LEBC clients can choose to share some or all this information with their LEBC Financial Planner. You can switch sharing on and off whenever you want, as well as selecting different settings for different accounts or assets.
How will Hummingbird help me?
Hummingbird will allow you to see all of your finances in one place, helps you gain clarity on your personal finances in totality with both assets and liabilities included. The app can send you personalised nudges to let you know how you’re doing day to day, alert you when your loan to value might enable you to find a better mortgage deal or spot fraud by flagging unusually large transactions. Hummingbird uses Artificial Intelligence (AI) to categorise the data it receives, making it easy to analyse your spending. Having clear and up to date details gives you greater insight into your spending habits and can help you identify where savings could be made. You’ll be able to set spending budgets and track your progress through the month. This could help you work on reducing your debts or putting extra money away in savings or pensions.
It can assist those approaching retirement to get a real feel for their future income needs and home buyers establish how much they can afford to borrow. It is helpful to young people leaving home who may need to budget for bills for the first time.
How will Hummingbird help LEBC to advise me?
Samantha Seaton, CEO of Moneyhub explains some of the key benefits:
“Traditional means of securing all the data a financial adviser needs to give personal holistic advice relies on their client providing this information, which is time consuming and may leave room for error. Now, using the power of Open Banking it’s much simpler. By analysing up to date and accurate information available at their fingertips, advisers can build a solid and reliable picture of their client with ease in relation to data collection, which enables them to provide advice more quickly. Indeed, if the adviser has a good understanding of spending habits, loans, property, savings, investments, pensions and so forth then they will be able to better tailor the advice they can offer.”
For more information on the Hummingbird app you can contact firstname.lastname@example.org.
Marketing Manager, LEBC
Charges for Hummingbird app may apply depending on your LEBC client status.
The value of investments can fall as well as rise. You may not get back what you invest.
Please remember, no news or research item is a recommendation or advice to buy. LEBC Group Ltd is not responsible for accuracy and may not share the author’s views. All information is based on our current understanding of taxation legislation and regulations. Tax rates and allowances may change in future and depend on individual circumstances. The Financial Conduct Authority does not regulate Tax Advice or Cashflow Modelling.
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