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CMA warns HSBC about inaccurate Open Banking information

Monday 23 January 2023 15:01 CET | News

Multinational banking group HSBC has received an official warning from UK’s Competition and Markets Authority (CMA) regarding failures in providing the correct information about the Open Banking processes.

According to the UK’s Competition and Markets Authority (CMA), the bank published multiple times wrong information about charges, rates, and fees, including details about loan eligibility across more than 50 instances. 

The actions represent a direct breach of the PSD2 Open Banking regulatory framework, announced and introduced in 2018. This requires banks, especially high street ones, to share services, products, and solutions information correctly and accurately through the Open Banking APIs. 

This affects the experience of their customers, as they will not trust their services and products in the future if the issue is not solved. However, according to the press release, HSBC has already taken full responsibility for the actions by self-reporting the issues, while taking immediate action to resolve and eliminate them. In the meantime, the CMA will continue to monitor the situation. 


Multinational banking group HSBC has received an official warning from UK’s Competition and Markets Authority (CMA) regarding failures in providing the correct information about the Open Banking processes.

 

HSBC’s development strategy

At the beginning of January of 2023, Omar Air announced its partnership with HSBC Omar for an international payments process, aiming to increase efficiency and security for their clients. 

The solution leveraged a centralized treasury hub in Oman that powered HSBC’s Global Disbursement, a service for Omar Air. This system provides simultaneous multiple currency payments as well as an improved and developed track and trace function for every transaction or payment the customer might do. 

With this new service, Omar Air has the possibility to process foreign currency payments through a single bank account using the HSBC global network. This process minimises dependency on a third-party service and reduces the costs of processing all the required payment types. 

HSBC’s products and services were divided into three business segments for this partnership: the retail banking and wealth management segment, the commercial banking segment, and the global banking and markets segment. The retail banking and wealth management segment provides personal banking, wealth management, and consumer finance products for individual customers, while the commercial banking segment offers receivable financing services, payment management, cash management, international trade finance, commercial cards and insurance, capital markets, cash and derivatives in foreign exchanges and rates, as well as online and direct banking offerings. The third segment, global banking, and markets offer financial solutions to government, institutional, and corporate clients. 

The merger, being a subject of approval from relevant regulatory bodies, as well as from the respective shareholders of the two companies, is still expected to be completed in the second half of 2023. Following the collaboration, all the assets and liabilities of HSBC Omar are transferred to Sohar International, and HSBC Omar is expected to cease to exist as a legal entity. 


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Keywords: Open Banking, Open Finance, online banking, regulation, online payments
Categories: Banking & Fintech
Companies: CMA, HSBC
Countries: United Kingdom
This article is part of category

Banking & Fintech

CMA

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HSBC

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