This seems fine as NatWest has made the industry’s first open banking variable recurring payment (VRP) with the help of TrueLayer.
VRPs are an additional open banking API that the nine largest UK banks have been instructed to build by the Competition and Markets Authority (CMA) for sweeping. They support third party providers (TPPs) like TrueLayer to initiate a series of payments for a customer of variable amounts and at variable intervals.
According to TrueLayer, this is a change to the current open banking status quo where TPPs can only initiate single immediate payments and customers have to authenticate each payment separately. The new requirement from the CMA means TPPs can provide recurring payments for any customer that banks with one of the nine biggest UK banks.
The transactions were made in a live environment rather than a sandbox – and “have shown that VRP works as intended before their introduction in 2022”.
Daniel Globerson, Head of Bank of APIs at NatWest Group, comments: “VRP is a ground-breaking innovation that has huge potential to benefit consumers and businesses. It demonstrates the value of industry collaboration, which is crucial if open banking is going to evolve into open finance.”
Matt Parish, Product Lead for VRP at TrueLayer, adds: “VRPs have been discussed for years as a missing part of open banking – now we need to test these APIs to be thoroughly prepared and ensure they deliver on their promise for consumers.”
The term ‘open finance’ has been around for a while. KPMG explains that it is used to describe the extension of open banking data-sharing principles across a broader range of financial sectors and products, including savings and investments.
In other news this week, NatWest was fined £264.8 million for anti-money laundering failures.
The offences related to operational weaknesses between 2012 and 2016, which meant that NatWest did not adequately monitor the accounts of a UK incorporated customer.
The case relates to a Bradford jeweller with a predicted annual turnover of £15 million when first taken on as a client. The jeweller ended up depositing £365 million with the bank over a five-year period, including £264 million in cash.
“At times, thousands of pounds in cash was brought into the branch uncounted in big black bin liners,” stated the agreed statement of facts. The Guardian notes that a member of staff later told FCA investigators that they often found that the weight of the cash “was too great for the bin liners, which would then break”. Staff would have to move the cash into stronger hessian sacks.
“The cash filled the branch’s two floor-to-ceiling safes. Excess cash and other items had to be stored behind grilles in the vault,” said the statement.