Let’s be open about ‘Open Banking’
According to PwC, 71% of SMEs and 64% of adults will be using Open Banking by 2022 . But before we get into it- are you confused about what Open Banking is? Well you’re not alone.
Our team has compiled the most frequently asked questions we receive from people just like you, trying to understand how Open Banking can help them on an everyday basis.
To start with, we came up with a short Open Banking story to simplify the concept
Fatima has multiple bank accounts, and on every month, her salary runs out. Fatima finds it difficult to know how her money was spent, and can’t get an overall view of her finances. One day, she gets referred by a friend to use an Open Banking platform that can help solve all her concerns. Fatima was able to log in to the platform, add all her bank accounts through verifying her identity using a fingerprint- and now she can finally see all her transactional information on one dashboard. Awesome! isn’t it?
The process was seamless, and most importantly, secure. Fatima now has an overview of all her financial activities, and can track her spending patterns that are categorized showing her how much she spent on food, shopping, education and more.
Fatima is not alone, and I’m sure several readers of this article can relate not knowing where their money goes. It happens to all of us, and this why Open Banking is the next step.
What do consumers want from their bank today?
They’d probably want a personal AI assistant to help them save, get automated financial reporting that combines all their bank accounts, automatically calculate spending patterns and sweep spare money into savings or investments, and more. Most consumers don’t get the above features or tools from their current banking provider.
How can Open Banking change the game for consumers?
Open Banking, in simple terms, puts consumers firmly in control of their finances, and allows them to choose which licensed third parties they want to share their transaction data with. These third parties, which are basically smaller FinTech companies and startups, study your banking behavior to better match your profile and send you better financial products that suit your real needs.
This is the start of a new era in banking and payments. With all our bank accounts, and our comprehensive data integrated in one application; we can access the features we demand to make better financial decisions in different ways.
How secure is Open Banking?
Firstly, everything is on the cloud using encryption technology; such as biometrics reassuring consumers they are the ones in control, and are able to lock your own information. Second, the Open Banking platform is licensed and only work with regulated entities- just like ourselves. And most importantly, a consent management system allows users to view all their consents and revoke it at any point in time.
In summary, the financial world is moving towards an ‘open system’ which will change the dynamics of banking for consumers. The role of Open Banking will grow further as more players will recognize the benefits.
Stay tuned for the next article – ‘Open Banking – What does it mean for banks?’