Open Banking Use Cases – Beyond Banking

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Why is Open Banking so exciting? Well, it’s simple, it means more choice and better services for customers. It enables intelligent technology not only to empower users but also to build a stronger economy. Each industry has realized the importance of these main elements – customer experience, digitalization, collaboration, and the focus on data. And, while Open Banking is revolutionizing the banking sector, it can impact other industries as well.

Industries Open Banking is Set to Disrupt:

  • Travel: How about traveling without a passport? Open banking has huge potential to improve the process of travel identity verification. Why? Because opening and operating a bank account requires the same type of documentation required for travel. With the use of open APIs; digital identity providers can access customer identities via their banking platform quickly and securely.
  • The property and real estate sector: Through the authorized access to consumer data, customers will be recommended with options that consider their spending preferences. An example of this would be if you’re spending habits indicated that you prefer a certain department store or transportation method then you would most likely prefer to live in an area that has easy access to those specific facilities. Open banking also means landlords and agents have access to prospective tenant’s affordability, credit assessment, and historical financial data. This enables efficient and quick decisions on a tenancy to be made accurately.
  • The insurance sector: This sector is currently at the exploratory phase when it comes to how we can utilize Open Banking data and its functionalities. There are several use cases for the insurance sector such as better deal engines, personalized advice, and optimized claims management to improve reconciliation and reimbursement. The technology is so advanced and detailed that essentially, companies can algorithmically underwrite without the use of a medical examination. Open Banking data can be used in analyzing proxies on how someone lives their life. These algorithmic-based analyses can allow someone to get lower rates on health insurance.
  • Enabling wage transparency: With open banking powered apps that can support wage transparency, employees will be in a better position to negotiate salaries and seek promotions. Overall, this would help promote fair pay and sustainable labor migration. According to INSEAD Research, examining wage statistics and disclosing them in Danish companies revealed the difference in gender compensation helped reduce the pay gap by 7 percent.

It is safe to say that Open Banking has the potential to not only transform the financial services sector but how we live our everyday life. Exciting times ahead for all of us!

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