Ahead of the launch of Open Banking in January 2018, first direct is partnering with Bud, a fintech start-up, to trial a new business model, which provides customers with an integrated offering of financial services products and tools from across the market, including those from other providers where most appropriate.
The trial forms part of HSBC UK’s Open Banking strategy, and follows on from the recent announcement of the HSBC Beta trial.
Over the coming months the Group will be evaluating new opportunities brought by Open Banking across its different brands in order to continue to provide the latest in customer-focused services and digital banking offerings.
first direct is trialling the business model with Bud among both customers and non-customers. Using Bud’s bespoke technology, it enables people to link accounts across all their different banks securely inone app, giving them a complete view of their finances, and supporting them with a range of useful tools designed to help them meet their financial goals.
Some of the initial features include:
- Safe to spend – takes into account the regular payments within an your transactions (rent, bills etc.) and shows the actual balance you have to spend over the next month
- Lists – enables you to create separate lists of transactions across accounts. This can help you keep track of spending specific to you, such as household bills or gift shopping
- Goals – enables you to set-up financial goals and monitor you progress against them, such as saving for a holiday
- Virtual joint accounts – allows you to securely share lists and goals with partners, friends, family members, and housemates
- Spend analysis and the categorisation of transactions, by both vendor and account
The trial also uses the latest technology to make relevant recommendations of the most suitable financial and non-financial products and services based on an individual’s needs.
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.
Joe Gordon, Head of first direct, said:
“first direct makes it easy for customers to bank with us whenever and however they wish, so the next logical step is to help them manage all their finances just as easily.
“With our history of driving innovation in financial services, first direct is a great brand to trial this tool, as it plays to our strengths of pioneering amazing customer-focused service and new ideas. It will see first direct extend its great service to people who don’t currently bank with us, and if it’s successful it can’t be overstated just how much this new business model could shake up the world of banking.”
The trial follows on from HSBC Beta that also uses algorithms to identify when it’s safe to spend through nudges and auto rules.
Raman Bhatia, Head of Digital, UK and Europe at HSBC, said:
“At HSBC, we recognise that the sector needs to innovate to meet changing customer needs and we’re investing significantly in digital innovation, including working in partnership with fintechs such as Bud.
“The first direct trial and the launch of HSBC Beta show our commitment to delivering the best services and technologies to all our customers, across all our brands. It allows us to test, learn and develop in a live environment, and then deploy the new technologies at scale.”
The trial will include 2,000 first direct customers and up to 4,000 non-customers, running for six months from December.
- first direct Launches Face ID For iPhone X Mobile App (November 3, 2017)
- HSBC Launches “Connected Money” App (May 9, 2018)
- Mobile #1 Channel For First Direct Customers (November 10, 2018)
- HSBC SmartSave: New Micro-Savings App (December 5, 2016)
- NatWest “Mimo” – New Personal Finance App Trialled (March 31, 2019)