The next stage of the Open Banking Regulation is coming into effect on 14th September 2019, which means an update to the rules on the way that bank account information is accessed and shared.
It’s had an effect on what some bookkeeping software providers are able to offer. But, we’re glad to say that here at Pandle, our full array of Bank Feeds will still be available to our users.
But what does it all mean? Well, we believe in making things refreshingly simple, so read our guide to Open Banking, Bank Feeds, and what it means for accountancy software like Pandle.
What is Open Banking?
Open Banking is basically the UK version of the Payment Services Directive (known as PSD2).
PSD2 is a piece of European legislation which forced banking institutions to share customer data, if the customer gave them permission to do so.
Open Banking is the bit of the rules which says they have to do so in a standard format; a sort of ‘universal language’. Like the name suggests, it’s designed to make banking more open.
Why is Open Banking useful?
Open Banking is a secure way of transmitting data
With so many horror stories about scammers stealing bank details, the thought of Open Banking might be a bit troubling.
Well, with Open Banking, bank customers can actually choose to share their account information with another financial body who has been vetted by the Financial Conduct Authority (FCA) and is compliant with Open Banking rules. This way, customers can be reassured that their data is being securely transmitted, and to a reliable organisation.
As well as sending data, it can be used to make payments straight from a bank account, too.
It’s easier to shop around with Open Banking
Sharing financial information used to mean the customer either supplying unverified figures, or going to the time and effort of obtaining bank statements.
Through Open Banking, customers can temporarily share verified figures with authorised providers (with less hassle).
So, for example:
- Price comparison websites will be able to supply more accurate quotes.
- Sharing the details of an existing overdraft or savings account could reveal a more favourable interest rate elsewhere.
Open Banking makes it easier to manage money
Having everything in the same ‘language’ allows customers to make the most of software which can pull information from multiple sources, all into one place. Someone with two separate accounts, in different banks, could use this to monitor their finances much more easily.
It’s similar to how some of our business services work. In Pandle we have a feature called Bank Feeds. This automates the process of importing transactions from our users’ bank accounts into Pandle, which is less time consuming than entering the information manually. These automated bank feeds also reduce the potential for data entry errors.
With our Bank Feed Balance Check users can also compare their bank balance in Pandle to their actual bank balance, to ensure there are no discrepancies which could lead to errors in their bookkeeping. It’s essential for accurate bookkeeping and managing cash flow.
Open Banking compliance
To continue offering this sort of feature, providers like Pandle must become authorised before the deadline date of 14th September 2019.
We’re glad to say that we’re currently working towards this and will definitely still be providing Bank Feeds for our users when these new regulations come into force. Bank Feeds are included in our Pandle Pro plan, which is priced at just £5 + VAT per month and includes a range of other time-saving bookkeeping tools.
Pandle is loaded with innovative features for straightforward, bookkeeping simplicity and fewer errors. Find out more about our services by clicking here.