Open banking may be seen as a buzzword in the banking and payment industries.
It promises new products and innovations that everybody can enjoy, namely banks, FinTechs, consumers and merchants. But open banking is much more than one product or service; it is a choice (regulatory or market driven) that allows a whole new financial ecosystem to flourish.
The list below shows that the use of open banking goes beyond payments, and many companies can benefit from having access to troves of financial consumer data. For more information on what data banks need to share or how this data is accessed, read our previous entries in this open banking series.
Personal Finance
Personal finance apps can cover a wide range of services, from budgeting apps, market comparison apps, debt advising apps and so on. These types of applications were part of the initial wave of innovations as third-party providers (TPPs) could access consumers’ data from their banks and provide personalized offers to their clients. Open banking helps improve the relevance of these services to consumers as more and more data is harvested.
Consumer Lending
Banks are the main beneficiaries of open banking in lending, as they usually don’t have the obligation to share data on loans or credits with TPPs. Open banking offers banks tools to create creditworthiness profiles of current and prospective clients to accept or reject cases faster. Additionally, it reduces administrative costs as more and more data are…
