Today, as Open Banking comes into effect, NatWest has warned customers regarding the risks that the new regulations could bring.
New rules on Open Banking give customers of nine banks, including NatWest which is owned by RBS, the ability to electronically share their financial information from personal current accounts with other banks and businesses.
The said plans aim to make it easier for the consumers to manage their money and to access more services as well as enable third-party providers, such as tech companies and other banks, to access customer information.
NatWest has warned that fraudsters and scammers could make use of changes and new regulation to their advantage.
The head of personal & business banking at NatWest, David Crawford, stated: “Although Open Banking will be strictly regulated, we sadly know scammers will try and use any new tool at their disposal to trick people into giving away their money.”
NatWest partnered with Future Laboratory, a research agency, to find the ways that scammers could make use of Open Banking to con people out of their money and how consumers can identify them.
Warning of NatWest to customers
- Copycat websites could pretend to be third-party providers: These sites look like the real thing, and may even have a web address that is very similar to a well-known site, such as the one operated by your bank. With all the new companies expected to launch propositions, customers might not be aware of which are genuine and which are run by criminals, so may be at risk of giving away their details, or even their funds.
- Scammers could pose as third parties: A scammer could hack into a third party to gain access to information held in current account statements or pose as a third party in correspondence to extort information. This could then allow them to fraudulently access customers’ money. Information, such as who your utility contract is with, could be used to extract money as part of a more complex scam.
- Third parties could ask for passwords: While Open Banking for personal customers only applies to current accounts at the moment, it’s possible that third parties may offer services that aggregate other account types (including savings accounts and credit cards) into one place. To do this, third parties cannot direct you to your online banking to give consent and will likely offer the option for customers to provide account passwords. The process of doing this is outside of the scope of Open Banking, and as a result, there are different risks involved. Customers should always be aware of the risks associated with sharing their passwords with a third party provider, and your bank’s standard security advice should be followed.