Money management

Why you should take advantage of Open Banking

11 May 2021 | Posted by Sarah Brill

Want to get on top of your finances and benefit from a more detailed understanding of where your money’s going? Open Banking is a safe and secure way to give third party apps access to your financial information.

How it could help you

If you have several bank accounts – which many of us do these days – third party apps can give you a consolidated overview of all your accounts and their activity, saving you time and money. On Claro, for instance, you can connect your bank account to get a detailed spending analysis. This can help you to understand where your money’s going and where you can cut back.

Open Banking can also bring you more accurate credit scores based on your up-to-date information, allowing lenders to offer you more personalised credit options when you need them most.

It could even transform the way you use price comparison websites. For example, if you choose to give a price comparison website access to your bank account information, you’ll get more accurate results based on what you actually spend. 

But is it safe?

Open Banking was set up by the Competition and Markets Authority on behalf of the UK Government. As the market continues to evolve, regulation becomes even more necessary to protect our sensitive data. 

Because of this, all apps and websites enrolled on the Open Banking Directory are regulated by the Financial Conduct Authority (FCA) or European equivalent. This means there are rules about how they operate and keep your data secure. You’ll also never be asked to give your password or login details to anyone other than your bank. So you can trust that your information is 100% safe when using Open Banking.

Remember that Open Banking is based on your consent. You’re free to change your mind at any time if you no longer want an app or website having access to your data.

Not sure who it’s safe to give your details to? Here’s a list of regulated providers currently offering Open Banking.

Does my bank offer Open Banking?

If you have access to online or mobile banking, it’s likely you’ll be able to use Open Banking.

To check if your bank or building society is enrolled, log into your online bank account and look for an Open Banking section. You can then allow these apps permission to read your data. 

How does Claro use Open Banking?

We’re still getting the Claro app ready for you (it won’t be long!), but soon you’ll be able to connect your bank account safely and securely to get a better idea of your spending. Just log into the app and head to the ‘Spending’ tab.

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