Open Banking Sweeping

Many of us will be familiar with open banking. That has two sides to it at the moment: account information and payment initiation. It looks like the Open Banking Implementation Entity is consulting on a third: sweeping. And I couldn’t be happier.

Full documents here:

It introduces “sweeping” as “simple, automated, mechanisms for moving funds”, then goes on to suggest a definition:

  • Sweeping is the automatic movement of funds between two accounts held at different institutions; and
  • There must be a sufficient level of automation to ensure that there are not unnecessary obstacles preventing the sweeping from taking place without direct involvement from the PSU [Payment Service User] as a prerequisite; and
  • Both accounts are in the name of the same PSU, and
  • Both accounts are UK sterling accounts.
  • One of the accounts needs to be a PCA [Personal Current Account] or a BCA [Business Current Account].

The document broadly endorses the idea but says it will be up to the CMA to endorse it and to regulate that it happens for the CMA9 (the nine biggest banks of a few years ago that were subject to particular regulatory scrutiny).

This is excellent news! Automation of money movement has long been the holy grail for me. And this should make it happen.

I’d really like to see Monzo get ahead of the pack, though, and offer similar automation for moving between Monzo pots before this comes in. I’d like them to create the climate, rather than respond to the weather, if you will.

Here are some cool things you could do with it:

  • Transfer cash in from savings when your current account is getting low. No more overdraft fees!
  • Automatically move your money when you’re paid. No more manual salary sorter (or, if you’re like me, waiting a few days for transfers to happen on the 1st).

And Monzo could take it a step further:

  • Move money to a Pot based on its incoming reference
  • Automatically add notes or change categories
  • Always round your main account to the nearest £1 (so no pennies)

I’m sure there’s a whole bunch more!

Have I mentioned that I’m very keen for this?

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I am getting slight hints of that

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But tell us what you really think Peter.

I need to read up on the proposals to see whether it covers my normal usage but it a promising move.

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This particular episode from this week did not hold my interest as much as some, but it covered existing CMA9 rules and touched briefly on sweeping:

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Okay this is very interesting!

I really think this should be happening anyway, as you say. Very natural extensions of all this ‘making money work’ to actually let us create proper rules etc.

Completely agree with your whole post tbh. I imagine we’re some way away if this is in consultation stage, but here’s hoping it works well if/when it finally happens.

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It was dated November 2020… I’ll do some digging tomorrow to see what stage it’s at.

But I do think mandated or not, Monzo should be leading the pack!

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