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'Scaremongering' banks called to account over open banking warnings

Telegraph Reporters
Big banks including Natwest have been warning their customers about the risks of open banking - Bloomberg News

Britain's big banks have been ­accused of “scaremongering” about changes designed to boost online ­competition by predicting it could spark a crime wave.

Fast-growing digital bank Monzo told The Telegraph high street lenders were “digging their heels in” by not embracing so-called “Open Banking” reforms that came into force last weekend.

Under the reforms, customers are given the keys to their own financial data, enabling them to change providers in minutes online with a few clicks.

It also enables consumers to see all their money on one screen and ­access better budgeting tools. But the changes have raised privacy concerns, with consumer groups Which? And Get Safe Online warning it could increase the risk of customers falling prey to scams.

Big banks including RBS brand NatWest have been communicating with customers in recent weeks about the potential risks of Open Banking.

Natwest warned Open Banking could lead to a sharp rise in criminal ­activity, including from copycats ­mimicking bank websites.

RBS chairman Howard Davies ratcheted up the concerns last weekend, saying: “We are not confident that our customers’ data will be protected from hackers and thieves [when it is shared with third parties]. 

“We cannot refuse to hand over data because that’s what the legislation says, but we will have to try to educate people to understand the ­vulnerability.”