Previously, banking has been a very closed playing field. Traditional banks historically held the monopoly over your account information, and customers didn’t have a huge amount of control over the use of their data.
The rise of Open Banking has had a significant impact in levelling this playing field; breaking the stronghold of incumbent banks on customer data, and unlocking the market to make way for some new kids on the block in the world of FinTech.
Open Banking is a series of reforms that means all UK-regulated banks will have to let you share your financial data, such as spending habits, regular payments and companies you use (basically, for the moment, your current account information), with authorised providers offering budgeting apps (such as Moneyhub), or other banks – as long as you give your permission.
With the additional introduction of GDPR and PSD2 legislation (which we cover further below), customers are now able to tap into a new data-sharing environment, built with customer consent at its heart. The result is a new ecosystem in which your financial information flows seamlessly between different institutions, with authorisation from and control directly by you, the customer.
For individuals, Open Banking marks the start of a new relationship with the financial services industry based on trust, transparency and consent. By enabling you to share your data securely, Open Banking means you can easily evaluate personalised financial products and manage your own finances across several accounts without having to go through your bank, truly putting the power back in your hands.
What is screen scraping?
This new wave of financial services products we’re seeing is underpinned by data aggregation and the categorisation of transactions, where FinTech firms are granted access to transactional data across their users’ bank accounts in order to broaden the scope of their digital offering for customers.
Until recently, a technique known as ‘screen scraping’ was the primary method of assembling this data. Screen scraping is the process of collecting screen display data from one application and translating it, so that another application can display it. Due to this, you will often see screen scraping referred to as an ‘indirect connection’, with Open Banking being a ‘direct connection’.
Screen scraping has undoubtedly delivered a valuable service to many customers, but the new possibilities that are now available through Open Banking are truly game changing. In January 2018, the UK Competition and Markets Authority (CMA) compelled all major UK banks to make customer current account transaction data available via an API; a method for an application to interact with another system. Ultimately, this meant that with the customer’s permission, apps such as Moneyhub can access data via this API, without the need for screen scraping.
On September 14th 2019, a further milestone was reached, with it being made mandatory for all payment accounts to use this API, due to legislation called PSD2. While the primary aim of PSD2 was to foster innovation and level the banking playing field, it came at a time where customer expectations of technology and digital safety were higher than ever. PSD2 therefore also aims to make digital transactions more convenient, cheaper and safer for you, the customer.
Crucially, this API – which is now made available by law - must use secure customer authentication (SCA) during login. This change will quite simply make screen scraping for all payment accounts impossible. At the same time, PSD2 legislation makes it illegal to access payment transaction data via screen scraping for payment accounts from 13th March 2020, even if still technically possible.
Does screen scraping still have a place?
With roughly 75% of organisations developing both internal and public-facing APIs and legislation encouraging this route as the industry standard, it’s clear that API integration is the future. However, until the industry achieves full Open Data via APIs, screen scraping is still required to view a customer’s full financial picture, as not all financial accounts are yet required to offer API access. For example, currently markets such as pensions and investments have no obligation to make data available by API.
It’s important to note however, that the process of screen scraping (in a read-only format) is widely acknowledged as a ‘safe’ process, when done by an organisation that takes data security seriously and has the customer’s best interests at heart. Screen scraping has been common practice since the 80s by many financial institutions, from credit bureaus, news organisations to the banks themselves, in order to streamline processes involving legacy systems and to minimise the need for re-keying data.
In the short term at least, offering a combination of direct Open Banking APIs - and indirect screen scraping connections for those situations where this is not an option - gives you the most optimal solution to see all your finances in one place as a customer.
How does Moneyhub fit in?
Moneyhub is, at its core, an Open Banking platform. Not only was our API one of the first live Open Banking integration, but our technology features the most data links of any aggregation provider in the UK. We have invested considerable time and money in direct API Open Banking integration to deliver innovative, secure banking services for our customers, and benefits beyond ‘just’ data, such as auto-categorisation and insights via personalised smart nudges. Certainly at this stage, however, coverage of all your finances and investments depends on using both API integration and screen scraping to deliver this seamless, holistic service to you.
In light of this, we have established a triage system to find the best source of data when a customer account is connected, starting with direct Open Banking APIs, followed by bespoke APIs that are available and implemented, through to screen scraping (indirect connection) when necessary. In addition to our account triage system, we also have a set of migration tools in place to support the move from screen scraping to direct Open Banking APIs - and more broadly, Open Data APIs - as and when these become available.
In summary
In the short-term, screen scraping will continue to be a workaround for those instances where APIs are unavailable, but it won’t be long until this method is a thing of the past. With the end goal of opening a closed market and ultimately empowering our customers, the importance of any system has got to be about those three key traits of trust, transparency and consent. The days of arguing about who owns customer data are well behind us. YOU own your data - every last transaction of it.
Would you like to know more?
Find out more about Open Banking here, check out our FAQs section, or get in touch with us below if you have any questions – we’d love to hear from you.