Looks like First Direct is trying to push forward to advertise cheap deals for customers, do wish they’d sort out their online banking first.
UK bank is set to become the first to push personalized energy and broadband deals to consumers, in a move which could spell the end of shopping around on price comparison websites.
First Direct is trialing a new smartphone app which trawls a database of thousands of deals to recommend specific products from third-party providers.
It comes ahead of a major online banking revolution in which financial institutions are being forced to share customer data so people can see all their money on one screen.
First Direct’s app will let consumers hand over spending and saving data from all their financial accounts, in return for notifications about bespoke deals which could save them money.
It will analyse customer data to recommend them financial products like mortgages and loans, as well as non-financial products like gas and electric tariffs, or broadband and television packages.
The hope is that consumers will then buy the deals by clicking on them.
The app, which will be powered by financial technology firm Bud, will charge providers a fee if people click and buy, which will be split between Bud and First Direct.
Last night consumer groups said the move could revolutionize the way consumers shop around for deals, but warned that banks flogging poor deals would rapidly damage their reputation.
James Daley, director at consumer group, Fairer Finance, said: "This could really be a game changer which could take the hassle out of shopping around.
But the temptation will be for banks to maximize potential for themselves. Prioritizing this over helping people save money would be the quickest way for them to destroy their reputation." Gareth Shaw, money expert at Which? stressed the importance of keeping customers’ data safe.
He said: “Open banking has the potential to give people greater control of their money and boost choice, but it also raises critical questions around data privacy and security. “Before it comes in, regulators and the industry must set out how they will protect customers from data breaches and scams, which is vital if they are to build trust in these services.”
Following a two-year probe into rip-off bank accounts the Competition and Markets Authority last year announced new rules to let customers access details of their entire finances through a single mobile phone app by 2018.
Banks were told that customers must be given the capability to apply for loans, overdrafts and mortgages on their mobile phone, as well as be able to transfer money between accounts.
The move is expected to increase competition by allowing customers to access all of their finances - including current accounts, savings accounts and mortgages - in one place even if they are currently manged by different providers.
Banks using such data to generate product recommendations was not one of the ideas put forward by the CMA, but it is expected that other banks will follow First Direct’s lead.
Bud confirmed it was in talks with a number of other major banks over developing similar apps.
A HSBC spokesman said: “Making third party products available for the benefit of customers marks a significant change for UK banking, and is the first example of a large financial institution in the UK adopting this stance.”