Out-Law News | 30 Jun 2014 | 2:50 pm | 2 min. read
The new service is intended to allow customers to use new comparison tools to see which current account might be best for them, with reference to how much they actually spend and where they spend it, the government said. It is part of the government's 'midata' initiative, which is intended to provide consumers with better access to their personal data so that they can choose better products and services.
Barclays, HSBC, Lloyds, Nationwide, RBS and Santander will be the first to offer the new service.
Speaking at an industry conference hosted by the British Bankers' Association (BBA), economic secretary Andrea Leadsom said that the initiative had the potential to make a "real difference" to customers and to competition between banks "by helping customers get a much better understanding – for the first time – of how they are spending their money, and which is the best product for them".
"I am delighted to confirm that the format has now been agreed, and the service will be available to customers by the end of the financial year. Current account holders will be able to download a year's worth of their transactions in a single file, which they will then be able to use in online comparison tools," she said.
The initiative is part of the government's drive to encourage competition in retail banking and follows the launch last September of a new standardised switching service that allows current account holders to switch more easily between accounts offered by participating providers. The Current Account Switch Service (CASS), operated by the Payments Council, offers a guarantee to users that they will not face any charges or interest on their old or new accounts due to failings in the switching process if they inform their new account provider of these failings.
Once operational, the new service will allow customers to download a year's worth of their current account data in a single file that can be read by online tools. This data would be stripped of any details that directly link it to a particular individual, but would include what shops money has been spent with as well as how much, according to the government's announcement. The intention is to enable comparison sites to recommend accounts which include loyalty points or offers that would benefit that customer.
The BBA used the conference, which was themed around better competition, to launch its own report into how best to promote competition between UK banks. The industry body made a number of recommendations to address the difficulties facing new entrants to the retail banking market, including less onerous capital requirements for 'challenger' banks and the removal of restrictions preventing public bodies from investing in smaller banks.
"Customers are the biggest winners from competition," said James Barty, the BBA's director of strategy.
"The best way to promote competition is by creating a more level playing field for players of all shapes and size. It's vital that we don't treat all banking markets as the same and introduce rules, regulations and costs that smother changes that are already driving competition," he said.