Out-Law News | 18 Mar 2014 | 3:56 pm | 2 min. read
The UK Treasury and Department for Business, Innovation & Skills (BIS) said that Barclays, HSBC, Lloyds, Nationwide, RBS, and Santander had signed the agreement with it and that it anticipated all current account providers making a similar commitment in future.
The departments said that the agreement would work in conjunction with the new Current Account Switching Service (CASS) that banks launched last autumn. It said that a new "comparison tool" is to be developed on the moneysavingexpert.com website to allow consumers to import their standardised account data and assess whether rival providers are offering them a better deal.
"This means that instead of spending hours and days poring over their account statements and then researching individual products from other banks, consumers will be able to do quick and easy comparisons of their accounts, including the fees, charges and benefits attached, and allow them to make informed decisions on whether there are better accounts for them to switch to," the Treasury and BIS said in a joint statement.
"This is a major breakthrough in empowering consumers and increasing competition in High Street banking. The absence of effective price comparison tools in the current account market, where one person’s account usage could incur very different costs to another, depending on how each person uses the same account, is hindering the ability of consumers to make informed decisions," they added.
The departments said that the commitment made by the banks was part of the UK government's 'midata' scheme. That voluntary scheme requires signatories to provide consumers with access to their personal data in a "portable, electronic format". The 'consumer data' principles that midata adopters adhere to include making the data available in "an open standard format" that is "reusable" and "machine-readable" in as standard form as is possible across sectors.
The initiative, established by the Government in 2011 and backed by major brands such as Google, RBS, British Gas and Visa, is intended to allow consumers to be able to access their information quickly and be able to use the information the businesses provide them with to "analyse, manipulate, integrate and share" the information "as they see fit".
However, the government has previously bemoaned the lack of widespread uptake of the midata scheme and has threatened to force certain businesses, including current account providers, to comply with the regime. The Government has backstop powers, under the Enterprise and Regulatory Reform (ERR) Act, to force energy suppliers, mobile network operators and current account and credit card providers, or any other group of organisations, to provide customers with access to their electronically-held transaction data.
The government is currently undertaking a review of the adoption of the midata initiative and is due to report this month on its progress. The report will help the Government decide whether to "require companies to release the data they hold on consumers", a UK government minister recently said.
"While seven day switching has reduced the hassle, people still find it difficult to assess the tangible gains as there’s no simple price tag on bank accounts," Martin Lewis, creator of moneysavingexpert.com, said. "Midata will for the first time enable people to truly interrogate their own banking usage to switch to their perfect provider. Yet we need to ensure that is simple, easy and consumer friendly – and once the data is available, we’re committed to investigating making tools to do just that."