Open Banking

What is Open Banking and why does it matter?

Open Banking is an initiative designed to improve and enhance everyone’s banking experience. The core idea of Open Banking is that you can provide Third Party Providers (TPPs) such as banks and other online providers with secure access to your account(s) so that you can manage your payment accounts in a way that is better suited to your needs. If customers have multiple payment accounts they will be able to see those accounts all in one place.

Putting you first

Open Banking has, first and foremost, been developed with the consumer in mind. Increased competition leads to originality and creativity, with organisations incentivised to launch offers and services that set them apart from the competition. This means that the consumer benefits from personalised deals that match their needs.

However, it is also worth noting that Open Banking is not obligatory. Those who want to take advantage can, but it will not be forced upon anyone. All banks however, will need to conform and consumers can only benefit if they have online banking.

Safe and Secure

Of course, Open Banking would not be viable without robust security measures having first been put in place. Providing banking services that are efficient and safe is of the utmost importance, and protecting the details of customers is fundamental.

Since early 2019, Lombard has been liaising with a number of technology firms to develop Application Programming Interfaces, more commonly referred to as APIs. APIs enable information and data to be shared securely, and are tested thoroughly and regularly to ensure maximum levels of security.

An industry-wide evolution

The European Banking Authority (EBA) responsible for strengthening business competition and preventing anti-competitive activities following to coming into law the Payment Services Directive (PSD2) have introduced Open Banking to increase competition in banking.

From January 13 2018, banks must allow customer data to be shared with EBA approved financial organisations and third party providers. Data will only be shared if customer gives consent for their data to be shared. If they do not want to they do not have to do anything, their data will never be shared without their explicit consent. Most of Malta’s major banks are working together to ensure a consistent approach to the sharing of data that will allow Open Banking to be introduced seamlessly.

Giving your consent

Before you give consent for any third party provider (TPP) to access your accounts, it’s important that you understand the services they are providing and how they will use your information, including if they will be sharing it with anyone. You should also take reasonable steps to ensure that the company is legitimate.

To obtain your consent to access your accounts, TPPs can:

• Redirect you to Lombard, where we will take you through a detailed online authorisation process. If you are familiar with the way to log on to our Online Banking, then this process will be very similar. A One Time Passcode (OTP) will be required to complete the consent process. This will be sent to the OTP mobile number registered with us. Remember you should never share an OTP with anyone, not even a Lombard employee.

Before sharing your details with a TPP you should take reasonable steps to check the TPP is legitimate. In all cases, be vigilant and check the transactions on your account regularly. Once the TPP has your consent and has obtained access to your information, we cannot control how it will be used.

Remember you can withdraw and manage your account information consents at any time in Online Banking. Simply log on, choose ‘Account Services’ then click on ‘Third Party Providers’ from the menu.

Making Payments

Open Banking can also be used to make a range of payments directly from your accounts. It’s a new way to pay through third-party apps or websites.

For payment initiation services, how you give your consent depends on the kind of payment you are making:

• Single immediate payments: you will have to give your consent every time a TPP initiates a payment on your behalf. The payments will normally come out of your account straightaway, although they can take longer. Once you have authorised a payment, we will not be able to stop it. The payments initiated by these companies are taken directly from your account using your account details and not your card. Any cashback benefits associated with your cards, including Retailer Offers, will not apply.

How it works:

1. The third party will confirm the payment amount and ask if you want to pay directly from your bank account.
2. You will be passed on to Lombard Open Banking.
3. We will show you a summary of your payment, the amount and where your money will be going.
4. Once you have given your permission, the third party will make the payment directly from your account.

• Standing orders: you will need to give your consent during the set up of the standing order. Once the consent is given, your scheduled payment(s) will work as normal.
• Future-dated payments: you will need to give your consent every time you wish to set up a future-dated payment. Once the consent is given, your scheduled payment will work as normal.

Statistics on the performance and availability on Open Banking

• Daily average time
• Daily error responses
• Interfaces availability

For FAQs click here.