Proposition - Messaging to support CASS

1. Version control

Version

Date

Authors

Comments

Version

Date

Authors

Comments

V0.1

May 12, 2020

OBIE Standards Team

Draft for internal review.

V0.2

May 15, 2020

OBIE Standards Team

For industry consultation & feedback.

V1.0

Jun 24, 2020

OBIE Standards Team

Final version for approval at IESG.

2. Roadmap item definition

2.1 Problem statement

The Current Account Switching Services (CASS) was launched in September 2013. It is a voluntary scheme, set up as an industry-wide initiative and operated by BACS. It makes switching current accounts simpler and quicker for customers. CASS offers two services to all personal and some business banking Payment Service Users (PSUs):

  • Partial Switch Service, which does not involve the customer closing their existing account or automatically transferring all of their payment arrangements.

  • Full Switch Service, which automatically transfers all payment arrangements to their new account and closes their existing account.

CASS has given consideration to the impact of open banking on current account switching. PSD2 requires that PSUs must give explicit consent to TPPs to connect to their payment accounts and provide services, such as AIS, PIS and CBPII.

For AIS and CBPII services, a PSU typically gives long-lived consent to (one or more) TPPs to access their account information or submit a request for confirmation of the availability of funds at an ASPSP. When the PSU switches their account from one ASPSP to another, it is not possible (due to regulatory and technical/security reasons) for the TPP access to be automatically switched to the new ASPSP. Therefore, the PSU will be required to provide a new consent to TPPs in order to provide access to their account at the new provider. In this scenario, the PSU would need to go through a new consent journey with each TPP, as well as a new authentication journey with the new ASPSP, in order to provide access to the payment account for each TPP service.

In their research, CASS identified that the there was a risk that the additional burden associated with re-establishing their existing TPP consent relationships, as well as having to authenticate, could discourage PSUs from choosing to switch current accounts.

If this happens, open banking could have the unintended consequence of making customers less likely to switch current accounts.

Currently, PIS services, implemented under PSD2, do not include the concept of long-lived consent and require the PSU to authenticate with the ASPSP for every payment. However, if and when Variable Recurring Payments (VRPs) are implemented, there would be an additional consideration as to whether the burden for the PSU of re-authenticating these services with a new ASPSP could further discourage account switching.

2.2 Scope

The CMA Order “Agreed Timetable and Project Plan” (see Notice of proposed changes to the open banking roadmap CMA May 2020) published on May 15, 2020, contemplates enhancements to support CASS.

On 26th March OBIE received a request from CASS (see Appendix) to progress consideration of two recommendations for inclusion in the OBIE Standard, namely:

  • Development of a specific account switching ‘message’ to allow the TPPs to identify more accurately the reason why they can no longer access the PSU’s account, thereby enabling them to engage with the consumer accordingly.

  • Review the potential for Push Notifications, so that a TPP can be notified earlier of a PSU’s intention to switch before the switch itself completes. CASS note that the evaluation and development of this initiative is not a high priority for the immediate future and have requested that this be considered in a subsequent phase of work. We propose to progress this as part of the Variable Recurring Payments (VRPs) evaluation undertaken by OBIE under the 2020 Roadmap.

Consequently, this proposition paper aims to address only the first recommendation above and define requirements as part of this Roadmap item.

The scope of the CASS recommendations relates only to the full switch service.

3. Market analysis

OBIE has conducted the market analysis as part of initial industry consultation. This analysis will be further validated in a further round of industry consultation during May 2020.

3.1 Impact for customers

Current account switching and open banking are both central to the reforms required by the Competition and Markets Authority (CMA) under its 2017 Retail Banking Market Investigation Order. Given the emerging uptake of open banking enabled services, CASS has given the consideration it is important to reduce the barriers to switching as far as possible – since this continues to be a key mechanism by which consumers exercise their choice and gain value. Open banking benefits are built upon consumers consenting to securely share their current account data with TPPs. Open banking enabled products and firms are not yet part of the current account switch journey.

The challenge for CASS, therefore, is how to develop the current account switch journey to help support the continued use of open banking enabled products so that consumers can realise these potential gains before, during and after a current account switch.

The Current Account Switch Service has completed over 6.6 million switches since it launched in 2013. Volumes have been increasing in Q1 2020. Business account switching volume totals between January 2020 and March 2020 were up 52% compared to the previous quarter. Awareness and satisfaction levels for the Current Account Switch Service are at 79% and 92% respectively.1

1CURRENT ACCOUNT SWITCH SERVICE DASHBOARD - Issue 26: April 2020

3.2 Impact for TPPs

During April and May 2020, OBIE has spoken to 11 TPPs active in the OBIE ecosystem.

While there is a general consensus around the benefit in being informed when the customer is switching account or has completed the switch, it is not a huge priority. TPPs have already developed workarounds to cater for accounts which are switching/have switched, therefore any additional messaging is unlikely to provide a significant reduction in the potential for customers to not switch their TPP access over.

The impact of TPPs can be summarised as:

  1. AISPs have indicated that the functionality would be useful, but not an essential priority.

  2. Notification may not be relevant for some CPBIIs - current models utilise Direct Debit to process payments, and the CBPII will be notified of any switch in advance by the Direct Debit scheme.

  3. Notification is not relevant for PISPs. FDPs and SOs will be switched anyway.

  4. Most TPPs cited concerns with their ability/appetite to develop new functionality at this time.

  5. Most TPPs indicated there would be a need for this in VRP, however, recognised that this will be part of the VRP solution and not in scope for this phase of work.

3.3 Impact for ASPSPs

During April and May 2020, OBIE has also discussed these CASS recommendations and potential solutions at TDA, which includes representation from each CMA9, Starling and Metro Bank.

While most ASPSPs are in favour of supporting the CASS recommendations, the impact for them can be summarised as:

  1. Some do not maintain a record in their online platforms of when the account has started to switch, only when the switch has completed. These ASPSPs may struggle to support a status message for anything other than when the account has switched.

  2. Some do not maintain a record in their online platforms of when the account has switched, as all account details are ‘archived' off their online platform and/or any link to allow the PSU to access this is also removed. These ASPSPs may struggle to support a status message for when the account has switched but may be able to support an initial message during the switching process.

  3. Some would prefer to support aggregated polling rather than a call for each account, due to the way they cache such data in their API platform but when a detailed impact assessment was done with all the CMA9, this option was not seen as a preferred option.

4. Use cases

The following use cases are under consideration for this proposition:

Group

ID

Description

Met

A: Message after switching is complete

UC1

As a Personal credit assessment/Lending service provider, I would like to receive a specific message from the ASPSP when I access a PSU’s account that has switched to another ASPSP so that I can ask the PSU to connect their new account to avail uninterrupted lending services.

Fully

UC2

As a CBPII, I would like to receive a specific message from the ASPSP when I do a Confirmation of Funds (CoF) check against a PSU’s account that has switched to another ASPSP so that I can ask the PSU to connect their new account to avail uninterrupted services.

Fully

5. Evaluation criteria

Key evaluation criteria that OBIE have applied for this proposition for effectiveness and proportionality:

  • Does the proposition meet the use cases from a PSU and a TPP perspective (from both an outcome and risk point of view)?

  • Is the proposition implementable by both ASPSPs and TPPs at a reasonable cost?

6. Product requirements

These are stated as requirements of the OBIE solution to enable support key use cases in relation to a full current account switch only.

These are not PSD2 requirements, rather are derived from the CASS Recommendations.

Requirements marked as 'M'(Must) are in the scope of the OBIE solution. All other requirements are listed for future consideration. The final column indicates whether each requirement is 'mandatory', 'conditional' or 'optional' for implementation by ASPSPs and/or TPPs. These terms are defined here: Categorisation of requirements for standards and implementation.

ID

Description

Requirement Applicable

MoSCoW

Rationale

Alignment

Implementation 

ID

Description

Requirement Applicable

MoSCoW

Rationale

Alignment

Implementation 

1

The OBIE Solution(s) must allow the ASPSP to send a specific message to the TPPs in response to an access request that they can no longer access if the account(s) has been fully switched to another ASPSP.

All Standards

M

CASS Recommendation

OBIE CASS Recommendation Letter _March 2020

Recommendation #1

Conditional*

 

2

The OBIE Solution(s) must provide guidance so that all participants make it clear to the PSU via their existing channel(s) that consent given to TPP(s) cannot be switched when an account(s) is switched from one ASPSP to another.

Guidelines

M

CASS Recommendation

OBIE CASS Recommendation Letter _March 2020

Conditional*

3

The OBIE Solution(s) must allow the ASPSP to enable the above functionality for all long-lived consents given by the PSU to a TPP.

All Standards

M

CASS Recommendation

OBIE CASS Recommendation Letter _March 2020

Recommendation #1

Conditional*

  • Mandatory for CMA9.

7. Measuring adoption

None.

8. Appendix

8.1 CASS Recommendation Letter

8.2 CASS Open Banking Paper

8.3 CASS Full Account switch

The full switch service applies where the customer wants a free service that automatically transfers all payment arrangements to their new account and closes their existing account. It guarantees that all payments associated with the customer’s old account will be switched to the new account and ready for use with effect from a pre-agreed switch date. Any payments that continue to be made to, or collected from, the old account will be automatically redirected to the customer’s new account for a minimum of 3 years. Redirection is indefinite for those customers who continue to require it. CASS also offers a Partial Switch Service, which does not involve the customer closing their existing account or automatically transferring all of their payment arrangements. It also enables a switch between account product types other than current accounts (where possible and when both service providers agree). The scope of the CASS Recommendations relates only to the full switch service. Below Full Switch, the diagram is sourced from CASS.

8.4 Roadmap item reference

The following table is taken 'as-is' from the published roadmap: