Open Banking, the implementation entity set up by the Competition & Markets Authority (CMA) to enable a new, secure way for customers to take control of their financial data and share it with organisations other than their banks, is pleased to announce the release of its Accounts and Transaction Information and Payments Initiation API Specifications.

Open Banking has developed specifications that determine how banks and building societies should enable other regulated companies to, with the customer’s express permission, access accounts and send payments. Using these standardised API specifications, banks and authorised third parties are now able to begin developing new, innovative propositions and to tailor their products and solutions to the individual needs of consumers and businesses.  These specifications are now available on www.openbanking.org.uk.

The payments initiation API will enable third parties to set up secure payments on behalf of customers and, once authorised by the customer, submit the payment for processing. The specification currently caters for the submission of a single, immediate, domestic payment from UK personal and business current accounts and is payment scheme agnostic, meaning that processing can take place via any payment system operator.

Imran Gulamhuseinwala, Trustee of the Open Banking Implementation Entity, said:

“This is the next step in the transformation and opening up of the banking industry to the benefit of consumers and businesses. In March, we delivered on the first of the CMA Remedies with version 1 of the branch, ATM and product data APIs from the nine largest business and personal current account providers in the UK.

“The specifications we are releasing today, which will be live from January next year, provide the platform for developers from banks, fintechs and other organisations to build new web and mobile applications that will deliver a safer, more personalised and easier banking experience for consumers wishing to search, select and switch financial products in a secure environment.

“We are on track with our plans to develop a world leading open banking service where consumers will be able to significantly benefit from moving, managing and making more of their money.”

Danny Healy, financial technology evangelist, MuleSoft, said:

“It’s important to recognise that payments initiation APIs won’t be a differentiator in themselves, as the same capabilities will be expected from all banks from next year. If they only go as far as these specifications, there is the risk that banks’ payment services will become commoditised. Consumers will decide which bank’s service to use in the same way they choose one fizzy drink over another, based on their own personal brand preference.

“To avoid this, banks should be looking at how they can offer innovative solutions beyond payments, such as personalised services that are tailored to the customer’s financial circumstances. Research has suggested that such a move would be welcomed, with 37% of consumers complaining that the service their banks provide isn’t personalised to their needs. As such, banks will need to ensure the APIs they create are reusable so that account and transaction data can be reassembled into additional innovative solutions that make them stand out from the crowd. Banks like Barclays are doing exactly this, experimenting with the capabilities that can be unleashed through its APIs during hackathons.”