HSBC’s first direct subsidiary has agreed a partnership with fintech start-up Bud.
The deal represents the first example of a major UK bank making third party products available for the benefit of customers.
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first direct and bud will trial a new business model, providing customers with an integrated offering of financial services products and tools from across the market, including those from other providers where most appropriate.
The agreement is part of HSBC’s push into Open Banking and follows the recent announcement of its 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-centric services and digital banking offerings.
first direct is trialling the business model with Bud among both customers and non-customers. It will enable people to link accounts from all their different banks securely in one 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.
Raman Bhatia, head of digital, UK and Europe at HSBC UK, 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.
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By GlobalData“The first direct trial and the launch of HSBC Beta shows 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.”
Some of the initial features available through the first direct trial include:
- Safe to spend: takes into account the regular payments within a customer’s account (rent, bills etc.) and shows the actual balance available to spend over the next month;
- Lists: enables customers to create separate lists of transactions across accounts. This can help keep track of spending specific to the customer such as household bills or gift shopping;
- Goals: enables customers to set-up financial goals and monitors progress against them, such as saving for a holiday;
- Virtual joint accounts: customers can securely share lists and goals with partners, friends, family members, and housemates, and
- Spend analysis and categorisation of transactions, by both vendor and account.
The trial also uses proprietary algorithms – Market+ – to suggest the most suitable financial and non-financial products and services based on individual needs.
The trial will include 2,000 first direct customers and up to 4,000 non-customers, running for six months from December.
Ed Maslaveckas, chief executive of Bud, added: “Our aim is to help identify the journeys that first direct’s customers are on. Whether they’re looking to buy a house or start a family, understanding what people want to achieve will help the bank serve its customers better with relevant products, in the right experience.
“first direct is a great brand with a pedigree in innovation and service. This collaboration will raise the bar for the customer experience in banking globally.”
