How Open Banking can help you get the best deal

Regular readers of this newsletter know we often advise you to shop around for better deals on your regular expenditure, especially your energy bills. That’s because it’s one of the quickest, easiest routes to improving your financial wellbeing. Ofgem estimate that the average person could save £300 a year just by switching gas and electricity supplier. And that’s just your energy bills: you could also save on your phone and broadband, insurance, mortgage and more by switching your supplier. Sticking with the same provider for years on end can be an expensive habit!

Price comparison websites have been around for a while now, and they provide a relatively hassle-free way to shop around. But over the last year, the options available to check that you’re getting the best deal have increased massively, thanks to Open Banking.

Open-Banking

What is Open Banking?


We’ve written about Open Banking on our blog before. Simply put, Open Banking allows consumers to safely and securely share their account information. Services use this information to help consumers with various aspects of their finances.

How can Open Banking help me get the best deal?


In the past, searching comparison websites to check whether you could pay less for your energy, broadband and so on could be time-consuming and a little complicated. So it was tempting to put it off, even though it was likely to pay off in the end.

Open Banking is making it easier to compare and find cheaper products. Up until now, you’d have to check your bills and tell the price comparison site what you spend now. But you can now authorise some websites and apps, such as the MoneySuperMarket app, to check your actual spend, directly from your bank account, at the click of a button. The app will analyse your spending habits automatically and look for better offers on the same services.

How can I keep my data secure?


To make sure you stay safe when using these services, there are a few things you need to do.

Before you sign up for any Open Banking service:

  • Check that the provider is on the FCA register - that’s how you know that they’re a legitimate, regulated provider of financial services. Ofgem recommends a number of sites that have been accredited with their Confidence Code. This Code should assure you not only that the site is legitimate but that their service is free, easy to use, and will provide you with the details you need.
  • Don’t agree to anything unless you’re sure you fully understand it!
  • Make sure you know how to cancel authorisation. You should be able to find this information on the company’s website, or by calling them.

After you sign up:

  • Follow all the usual advice about how to stay safe online. Check out our previous blog post on this here.
  • Check your statements. If you notice any unusual activity or payments from your account, contact your bank or account provider straight away.

Other things to remember


Switching to a different tariff or supplier shouldn’t take long - three weeks at the most. And your supply will continue uninterrupted. You should notice no difference, except that a different company will be sending your bills. And they will be lower!

If you get a Warm Home Discount, make sure the supplier you’re switching to offers the discount.

Not ready to use Open Banking yet? Don’t worry – you can still look for a better deal, and switch if you find one. Find a list of price comparison websites on the Money Advice Service website here. Don’t forget to shop around between price comparison sites, too! Some of them offer rewards for using their switching services, such as vouchers and cashback.

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