Banking system has tremendously changed in the last decade, and in yesteryears, personal and professional details of account holders were not more than archives. But, with new services evolving in the financial world, things have taken a new form, and those details are considered as data, one of the strongest contemporary resources to drive traditional-turned digital banking to the next level.
Open banking is one of trending digital banking practices where banks and other financial service providers open data for regulated providers to retrieve, use, and share.
Data of customers given to third parties, you got worried, right?
Data sharing has been controversial as financial services users are being more aware of data use, access, and capitalization practices. They now put their concerns forward to their respective financial institutions, be it bank, lending services or others. Modern-day banking users have more digital literacy at least when it comes to the use of data, but a big fat question is, “is this literacy enough to understand evolving banking practices or they would still doubt open banking where data sharing is a prominent aspect?”.
To resolve these confusions or financial literacy issues, why not to understand “Open Banking” in a deeper way than ever.
First of all, data sharing or its use by third-party institution is not unsafe as it seems because banks are efficiently putting in place their infrastructure for data of their customers to be shared more easily with third parties, when the customer agrees to do so. For instance, Yapily Connect is a feature that unlocks the potential of Open Banking.
The last part is equally important. Open Banking isn’t some ruse to allow banks to sell data of their customers more easily. The purpose is completely opposite- open banking was brought to improve financial services for customers. And by opening to data, they’ve kept in-house, it enables new financial institutions and new products to come to market, and use the data in innovative, and helpful ways.
So, does the story of Open Banking end here, no, it begins here.
Open Banking brings an ecosystem for data employment, where it helps all parties involved in the process-
For financial services providers– At the top of the chain, it will enable these providers to aptly innovate on their products as per evolving demands. Open banking will allow them to establish themselves in a more competitive way.
For large and small businesses– Those innovations done on product offerings done by financial services providers will mean more efficient and useful financial tools in small and large businesses- payments. It will resolve issues of automation, freeing up time, reducing the headaches of doing tasks manually, and the last but not the least, saving money.
For consumers– it will allow consumers to spend, borrow, or invest thoughtfully.
Open Banking has reshaped the financial service infrastructure, and thus allowing digital economies to expand exponentially. Its impact is not limited to one or a few countries, in fact, we can see such kind of services across the world, majorly in the UK. London is turning out into a major spot for open banking organizations facilitating consumers with innovative financial products almost every day. The offerings of open banking have been remarkable and look promising keeping the future needs of banking consumers.