HOW OPEN BANKING can HELP CONSUMERSOpen banking is a secure and simple way to help you understand your finances more effectively – from borrowing to savings, from credit scores to switching – and inform your financial decision-making. It’s also another way to pay bills, and for goods and services as an alternative to credit and debit cards, Direct Debits and standing orders. Scroll for more How does it work? Your bank account holds a lot of information about how much you earn, what you buy, your regular bills – even how much you spend at the supermarket every week. Before open banking, that information would simply be held by your bank or sit within unopened bank statements. By allowing you to securely share that information with regulated companies, you can find apps, products, and services to help you take control of your finances. Having a clear view of your finances can help you manage your money more confidently, get better value, and support your financial wellbeing. You’re always in control of what data you share, who you share it with – and you can stop sharing it at any time. Help with cost of living challengesOur handy guide explains how open banking apps and services can help you understand your finances, budget better, access affordable credit, build a regular savings habit, and more.Read our guide Open banking apps in action… Building your savings Help to manage debt Find cost-effective lending How open banking can help you Account dashboards Instead of having information scattered across different statements, account dashboards let you see all your finances – bank accounts, credit cards and savings – in one place. Having a clear, categorised view of spending over time enables you to understand your finances better and lets you take action on things such as upcoming overdraft charges, overspending, or wasteful expenditure, such as unused gym memberships or duplicate streaming subscriptions. Smarter saving Apps offer a handy way to help you save, without having to think about it, or move money yourself. This could be via savings ‘round-ups’, which save spare change from your regular spending, such as a coffee or supermarket shop, round it up to the nearest pound, then move it to a savings account. Saving apps can also calculate what you can afford to save each week, or month (you choose the amount and frequency), then move the money from a current account to a savings account, perhaps earning interest too. Faster lending decisions Giving banks and credit providers access to your transaction data (money in, and money out) enables them to make more informed lending decisions, more quickly. This can make it easier for you find cost-effective credit and competitive borrowing rates. Mortgage applications Unlocking your financial data simplifies and speeds up the mortgage application process without the need to produce piles of physical bank statements and pay slips. Simplifying paperwork Open banking apps can also streamline processes such as checking credit scores or comparing financial products. Debt management If you need help to manage debt, open banking can give you – and debt advice platforms – an immediate and accurate picture of what you owe to whom, to help you find the support you need. Make secure, accurate payments Using open banking as a way to pay means you don’t have to enter card details manually, or share bank details and sort codes, reducing the risk of fraud. It’s particularly useful for high-value transactions such as buying a car. Select to scroll to the previous slide Select to scroll to the next slide FAQsWe answer your questions about how open banking works. Am I automatically opted in to open banking? No. You’ll only use open banking if you give your explicit consent to a regulated app or website. It’s always your choice. Which organisations offer open banking as a way to pay? A growing number of businesses and public sector organisations now include open banking as a payment option. For example, HMRC offers it as a way to pay self-assessment tax, corporation tax, VAT and other taxes. You may have seen it on your self-assessment form as ‘Pay by bank account (new)’. You can see how it works here.Some energy providers, water companies, and local authorities also offer it as an option to pay your bill. You can even use open banking when you buy or sell a car through some online car retailers. If you make a payment by open banking, it’s sometimes referred to as ‘Pay by link’, ‘Bank Pay’, ‘Pay with Bank Transfer’, or ’Instant bank transfer’. My utilities company has asked me to share my data via open banking so they can see my ability to pay my bill. Is this okay? A growing number of energy and water providers use open banking data to help assess a customer’s ability to pay their bill, and in some cases, move them on to a more affordable tariff. For example, if a customer calls the energy company, and is eligible to go on the open banking journey, the team can send out a secure link which allows it to see a snapshot of the customer’s banking data at that specific time. This can enable an immediate switch to the lower tariff while they are on the phone.