The Competition and Markets Authority has reprimanded HSBC for violating more than fifty open banking laws, but the financial giant will not be penalized.
More than fifty times in the last five years, HSBC released false information and failed to provide the required information, according to the watchdog.
A number of accounts were impacted by the infractions of the open banking rules.
Using application programming interfaces, open banking grants third-party financial service providers access to consumer data held by banks and non-bank financial companies.
HSBC’s Failure To Provide Proper Documentation
The CMA stated that HSBC’s failure to provide accurate, complete, and current product and reference information could lead to consumers making decisions they would not have made if they had access to the proper information.
In June 2022, HSBC notified the breaches to CMA, which observed that the firm had taken proactive measures to cease the breaches and prevent a recurrence.
However, HSBC has previously violated the same standards, which makes the violations particularly troubling. In the future, HSBC must “ensure full compliance with the order,” according to the CMA.
While the CMA has stated that it will closely monitor the bank’s future compliance, it does not deem it necessary to take further formal enforcement action.”
A representative for HSBC stated, “We regret that some of the product information given via our Read Only APIs did not completely comply with CMA criteria. As soon as we noticed, we notified the CMA. Since then, we’ve taken efforts to enhance processes and guarantee that current information is readily accessible through our Read-Only APIs to prevent this from happening in the future.
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What is API?
An API is an application programming interface that permits the sharing of information between two programs. Open Banking APIs make available a variety of data to third-party financial service solution providers, such as payment initiators, account aggregators, and other developing fintech.
The announcement comes only one week after open banking entered a new phase following the CMA’s determination that the six largest banks in the United Kingdom have implemented the open banking roadmap’s standards.
The open banking trustee informed the CMA that the remaining roadmap items have been implemented by the six largest UK banks, including HSBC. Following the recommendation, the CMA determined that the route map was “largely complete.”
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