The Department for Work and Pensions has released a new update on its plans to spy on bank accounts. The department is reportedly running a ‘proof of concept project’ on using open banking in the administration of Universal Credit.
The company has signed a £104,000 contract with open finance specialist Ecospend Technologies to work on a six-month project, which began in May, using the company’s Datalink solution to enable DWP customers to give Ecospend permission to access and share information about their bank accounts and transactions to support their benefit claims.
The contract award notice includes the following note: “Given the demographic makeup of UC applicants, it is expected that approval rates will be significant. With this in mind, the DWP will benefit from a robust dataset providing valuable insights and lessons learned.”
READ MORE: Martin Lewis warns NS&I customers about surprise bills in their letterbox
Open banking enables the exchange of data between banks and third parties, which can be used to facilitate payments, other financial offerings and a range of additional third-party services.
The statement continued: “This comprehensive information is expected to contribute directly to the formulation and implementation of a highly effective long-term measure that will transform the future Universal Credit application process in line with ever-increasing customer expectations, while reducing the DWP’s running costs.”
“In addition, it will lay the foundation for subsequent iterations and improvements, particularly in the area of fraud prevention.” As part of its partnership with the DWP, Ecospend will provide the AIS technology infrastructure and ongoing technical support.
The task is to deliver a PoC in line with the requirements of the DWP’s Universal Credit project. Universal Credit is a one-off monthly payment to people on low incomes or who are unemployed or unable to work and replaces welfare payments and tax credits including Child Tax Credit, Housing Benefit and Income Support.
DWP’s proof of concept “will be supported by Ecospend’s Datalink solution,” according to a 64-page contract document that describes Datalink as “a configurable white-label AIS product designed to facilitate the secure exchange of financial data.”
