DWP launches bank account 'snooping' pilot for Universal Credit claimants

James Rodger

16 August 2024 at 8:29 am·2-min read

The Department for Work and Pensions has issued a fresh update over its plans to snoop on bank accounts. The DWP is reportedly running a "proof of concept project" on the use of open banking in the management of Universal Credit.

It has signed a £104,000 contract with open finance specialist Ecospend Technologies for work on a six-month project which began in May using the company’s Datalink solution. It will enable DWP’s customers to consent to Ecospend to access and share information on their bank accounts and transactions for supporting their applications for benefits..

Information attached to the contract award notice says: “Considering the demographics of UC claimants, it is expected that consent rates will be substantial. To this effect, DWP will benefit from a robust dataset, offering valuable insights and lessons learned."

Open banking enables data to be shared between banks and third-party service providers, which can be used to facilitate payments, other financial offerings and a range of ancillary third-party services.

The notice adds: “This comprehensive information is expected to directly contribute to the formulation and implementation of a highly effective long term operation, transforming the future universal credit application process in line with ever increasing customer expectations whilst reducing DWP’s operational costs.

“Furthermore, it will set the groundwork for subsequent iterations and improvements, particularly in the area of fraud prevention.” Ecospend will deliver the AIS technology infrastructure and provide ongoing technical support, as part of its partnership with the DWP.

It has been tasked with delivering a PoC in line with DWP’s Universal Credit Project requirements. Universal Credit is a single monthly payment to individuals on low incomes, or who are out of work or are unable to work, and replaces benefits and tax credits including Child Tax Credit, Housing Benefit and Income Support.

DWP’s proof-of-concept ‘will be underpinned by Ecospend’s Datalink solution’, explains a 64-page contractual document, which describes Datalink as a ‘configurable white-label AIS product designed to facilitate the secure sharing of financial data’.

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