1. A system that provides a user with a network of financial institutions’ data using application programming interfaces (APIs).
  2. Single API standard(so as to reduce complexity and confusion when different BFIs use different standards)
  3. Open banking regulations require banks to publish, both online and inside their branches, accurate and unbiased information that lets consumers evaluate their service quality.
    But, Fundamental premise: Data belongs to the customers and SME and not actually with the bank)

(just as Internet)

Why Open Banking?

Benefits to Bank
1) Using networked accounts, bank can get a more accurate picture of a consumer’s financial situation and risk level in order to offer more appropriate loan terms.
2) Increase Digital Revenue from new channels with Open Banking APIs
3) Increase bank’s appeal among the customer by being the first one to enroll in open banking thereby creating enhancing better customer engagement and retention.

“Open Banking APIs are extremely profitable. In fact, banks that embrace Open Banking APIs can expect to witness a 20% increase in revenue; meanwhile, those that reject the initiative may lose 30% of their revenue to “disruptive industry players” by 2020.” [1]

Benefits to the customers
1. Move, manage, make – more of your money
2. Manage money- example, Overview of multiple banks in a single app.
3. Give access to only those data you approve of and stop providing access at any point of time.
4. Better products and services:
a. Access to credit
b. Overdraft fees
c. Good deal on saving accounts (suitable accounts)
d. Move people to right products
e. Smart re-payment plans
5. SMEs- support in tax returns, help to manage cashflow if SMEs provide cashflow data
6. Customers need to give user credentials to other parties(only to bank).

Related Post

The Internet of Things: Making Our Lives More

The Internet of Things (IoT) is a network of physical d...

Elon Musk: The Man Who’s Changing the W

I. Introduction A. Definition of Elon Musk El...

Web3: A New Era of Decentralized Applications

Web3, also known as the decentralized web or the blockc...

Leave a Comment

Share via

You cannot copy content of this page