Last year when Apple acquired UK open banking startup
Credit Kudos there was a lot of speculation on how Apple was going to use the open banking data technology.
Frankly I’m quite excited to see Apple use it to advance their financial health tracking capabilities.
With the bank account data APIs now being available across Europe, I hope we’ll see Apple roll this out in more countries.
The article does not mention this, but much of the fraud can be removed by switching to bank payments (eg open banking payments) or by using the likes of BNPL.
It’s nuts how much effort goes in to trying to make credit cards work for the internet when they clearly were made to serve a different purpose.
Nordigen is an open banking platform - we help fintechs to connect to consumer and business bank accounts in Europe for banking data. We're a team of 100 people based in Riga.
Depends.
There's a bunch of providers (eg Yodlee) that ask for bank credentials (previously on HN https://news.ycombinator.com/item?id=18655712)
Akoya in US and most European providers use real bank APIs.
Unfortunately neither of these work in the US. Salt Edge supposedly supports US banks but when I reached out to them a few weeks ago (specifically for the purpose of using them with Firefly III) this was their reply:
> We regret to inform you that temporarily Salt Edge does not provide its services on the USA market.
Though in this case I’d likely lay the blame entirely upon the US banks themselves. For example, to my knowledge, Bank of America has no way to retrieve any of my transactions or data without letting an app impersonate me using my login information, which I’m not about to do.
Shameless plug: OP mentioned Plaid as a way to sync bank accounts, but if anyone wants to use a Plaid alternative in Europe, check out Nordigen (it's free).
Open banking (the actual regulated type in UK and EU) replaces (1) the need to rely solely on credit bureau data to understand someone's creditworthiness, which is often faulty or incomplete (2) the need to share paper/PDF bank statements (3) the need to share banking credentials with tech companies that do "open banking powered by screen scraping".
Because open banking is regulated, consumers now have a layer of protection that they didn't have before. And more people can prove their actual creditworthiness (as opposed to whatever credit bureaus think their creditworthiness is).
Full disclosure: I'm a cofounder of Nordigen, a freemium open banking platform. Views biased.
I'd be open to sharing banking data this way if there were strict controls at the user level. E.g. share the previous 3 months, 6 months, and so on. Also a way to ensure that it's one time only and not a continuous monitoring type situation.
If that were the case, it'd be a more convenient alternative to sharing statements as opposed to a massive violation of privacy.
Open Banking regulation has very little impact on how the collected data will then be used.
A separate regulation - the GDPR - would cover that but raising a complaint is very difficult and a complaint would involve the subject being aware of their data being misused; you can't complain about something you don't see.
My worry about Open Banking is that it makes it much easier for companies to collect a lot more data and would normalize the practice even more.
Currently there's already no reason for a credit check to be required for a lot of services such as internet or phone service (those aren't lending any money and can cut off the service in case of non-payment), but at least a credit check gives them very little personal data compared to Open Banking - I'd rather not have to give them even more data.
The best (and the only working) way of data protection is to never send the data.
...until it is no longer possible to function as a normal economically active member of your society without "consenting" to the data sharing. As others have said that might mean that you can no longer get a phone or a mortgage in some cases. Given the financial services industry doesn't exactly have a glowing reputation for either responsible handling of personal data or fair and rational decision-making processes some middle ground will need to evolve here if widespread abuse is not to be an inevitability.
That's the thing, until this Open Banking stuff, I simply shared my bank account statements where I filtered out whatever I didn't want them to know - and I was sure that only few people in a local bank branch will see it, and the papers were disposed later.
Now I'm avoiding all this stuff like the plague. I'll never hand out access to my bank account through API to anyone. No inter-banking features or cool fintech apps for me, but oh well. My bank has good enough offer and the app is nice too.
Depends what kind of subscription you have. If you take a subscription with a phone then I think it fair the phone paying plan gets marked. But if you only have a monthly sim only plan I don't think it is not needed.
> Because open banking is regulated, consumers now have a layer of protection
I'm sick of regulated solutions and generally moving toward more governmental reliance.
I wouldn't need a student loan or a mortgage if the government wouldn't cause inflation and back loans for every milestone of adulthood.
College and homes used to just be affordable. Everytime we bring in governmental assistance and regulation, we all just lose--well, not the players in the regulated and Frankensteined market, but normal people all just lose.
There's a certain irony (and ignorance) to this comment when you consider that house prices in the UK only started spiralling when councils were forbidden from building new social housing by Thatcher.
Previously 'governmental assistance' of council house building was the major house builder in the UK.
I won't deny my ignorance regarding the UK housing market. Here in the US, housing prices are clearly inflated by Fanny/Freddy and artificially low mortgage interest rates.
> Fannie Mae and Freddie Mac were created by Congress. They perform an important role in the nation’s housing finance system – to provide liquidity, stability and affordability to the mortgage market. They provide liquidity (ready access to funds on reasonable terms) to the thousands of banks, savings and loans, and mortgage companies that make loans to finance housing.
According to an economist piece from last year, both the US and UK have made it a policy of only allowing housing prices to drop when it’s essential and then only temporarily. This isn’t a sustainable method but unlike on the continent (Europe) having a house is an important cultural symbol (to Americans at least) and voters have come to see any decline as proof of poor leadership and it tends to result in bringing the opposition to power.
At some point we will have to allow housing to correct. It’s up there with social security running at a loss as problems we leaving for the next generation.
It is the responsibility of government to set the environment in which businesses can operate (since businesses are meant to operate towards maximum profitability.) I don’t understand people who don’t see a healthy role for regulations in a market economy.
Frankly I’m quite excited to see Apple use it to advance their financial health tracking capabilities.
With the bank account data APIs now being available across Europe, I hope we’ll see Apple roll this out in more countries.