WWT's Matt Berry in RTInsights: Banks must share their approaches to security and risk management to allay customer concerns about open banking.
As the open banking movement catches on globally, the financial services industry is undergoing a radical shift in how business is transacted and data is consumed. How do you rest confidently knowing your open processes are secure?
What once seemed like a conceptualized slogan, open banking is now a tangible practice making its way around the world for its advantages to the customer experience and efficient bank operations.
But with reputation critical in the financial world, questions rightly linger over the safety and security of open-banking best practices among business leaders and customers.
Open banking – or open-bank data – is the practice of allowing third-party financial services organizations access to consumer financial data by way of application programming interfaces (APIs).
Open banking is vital to your customer experience.
Open banking gives consumers more control and freedom, providing better visibility for managing their finances holistically across multiple institutions. With the rise of online and mobile banking, this shift has enabled more financial organizations to meet their customers' personal technology expectations and preferences and enable consent to integration with other third-party financial institutions. Open banking gives consumers more control and freedom, providing better visibility for managing their finances.
Other benefits to consumers include:
Account aggregation: Open banking can lend more accurate financial data. A consumer can view personal and business banking, as well as investment, loan, and credit card accounts in one place. This allows financial advisors to provide a personalized recommendation, simplifying the decision-making process for all involved.
Accelerated credit access: Open banking puts consumers' credit history in one, easily accessible place. This allows lenders and underwriters to make quicker decisions on which products to offer. It also gives consumers better insight into the likelihood of being offered certain products in advance of applying, thereby accelerating the entire application process.
Innovation in personal finance management (PFM) and other banking tools: Open banking takes bespoke financial services for individuals to the next level. By centralizing data, providers can create better tools and tailor products that create financial insights in more personalized ways. Meanwhile, consumers can make more educated choices based on their financial performance and unique goals.
Transparent subscription management: Open banking technology can put all subscription activity onto a single interface, allowing consumers to view recurring payments and take action to cancel undesired subscriptions or set alerts for upcoming payments.