HSBC will face no penalty for breaching open banking rules over 50 times
The Competition & Markets Authority has criticised HSBC for breaching open banking rules on over 50 occasions, but the banking giant has been told it will receive no penalty.
HSBC published inaccurate information and failed to publish required information on more than 50 occasions over the last five years, the watchdog said.
The violations of the open banking rules affected a number of different accounts.
Open banking provides third-party financial service providers access to consumer data held by banks and non-bank financial institutions through the use of application programming interfaces.
It was introduced by the CMA in 2018 to free up data sharing between traditional banks and smaller startups, and now has over six million users in the UK.
HSBC’s failure to make accurate, comprehensive and up-to-date product and reference information available may result in “consumers taking decisions that they would not have taken if they had access to the correct information,” the CMA said.
HSBC reported the breaches to the CMA in June 2022 and the watchdog noted that the bank has “taken proactive steps to end the breaches and to prevent a recurrence.”
However, HSBC has breached the same rules before which makes the breaches “especially disappointing”. In future HSBC must “ensure that it complies with the order in full,” the CMA said.
While the CMA said it will monitor the bank’s future compliance closely, it “does not consider it appropriate to take further formal enforcement action”.
An HSBC spokesperson commented: “We are sorry that some of our product information provided through our Read Only APIs did not fully reflect CMA requirements. We notified the CMA as soon as we realised and have since taken steps to improve processes and to ensure up-to-date information is readily available through our Read Only APIs to avoid this happening in the future.”
An APIs is an application programming interface that enables information to be shared between two different applications. Open Banking APIs expose a range of data to third-party financial service solution providers including payment initiators, account aggregators, and other emerging fintechs.
The news comes just one week after open banking entered a “new phase” after the CMA determined that the six largest banks in the UK have implemented the requirements of the open banking roadmap.
The open banking trustee advised the CMA the six largest lenders in the UK, including HSBC, had implemented the remaining roadmap items. Following the advise, the CMA ruled the roadmap to be “substantially complete”.