The financial services industry has seen drastic technology-led changes over the past couple of years. Financial Institutions are recognizing the importance of leveraging data to deliver innovative products and intuitive services that differentiate them from competitors. Consequently, to be able to ride the new Open Banking wave, financial institutions have been collaborating with third-party providers to harness the opportunities that Open Banking can unleash.
Let’s take a look at the 5 most popular Open Banking use-cases:
- Account Aggregation: Giving customers the ability to aggregate and consolidate all of their financial information on one platform. In Bahrain, this includes aggregating your current, savings, deposit, loan accounts in addition to your credit cards as well to help customers better manage their finances. With all of this combined and integrated, banks are in a better position to understand their customers’ overall financial behavior.
- Personal Finance Management Tools: Third-party providers can offer customers easy to use to tools that would enable them to sort out their financial portfolio. Some of the most popular features include investment aggregation & tracking, automated savings, and product switching.
- Seamless Payments: Open Banking enables direct account to account payments which can significantly reduce the cost by eliminating card processors completely. It also financial institutions to increase the time and attention it has from customers enabling them to execute all their transactions from one place.
- Product comparisons: Do you want to apply for a loan but don’t know how to choose to right one? Through the use of open APIs and advanced data analytics, open banking platforms can recommend the right products to customers based on their spending behavior.
- Lending and credit risk: The amount of time required for customer onboarding or the application process can substantially decrease through the use of financial data.
- Financial data can offer the insights needed to make a genuinely informed decision that helps eliminate any risks the bank can incur
Open Banking opens the door to a whole new world of opportunities. In due course, we expect to see these elementary Open Banking use cases evolve rapidly across the globe as people become more aware of its benefits.