How every industry can benefit from open banking

September 14, 2020 | Louise Basse

There’s no doubt that open banking has become a buzzword in the financial industry over the past couple of years. With new legislation and technology on the market, open banking is a global trend that is here to stay.

But how does it actually work? And what businesses are able to benefit from the opportunities that open banking brings?

Hyper-personalised products and services

With digitisation, there has been a rise in consumers’ expectations for more personalised and convenient products and services. That’s where open banking comes into the picture.

Ultimately, open banking is about opening up the financial sector and allowing all businesses to build user-driven services. But open banking is not limited to the financial sector only. 

As new innovators enter the market, they will use open data to offer hyper-personalised products and services based on consumer control of their own data. Businesses across industries will be expected to spare consumers the trouble of searching for the best deals, and to deliver these deals directly and unprompted. Any service that saves consumers time can win a following.

Simplified workflows, frictionless payments

From user-driven PFM apps to accurate credit scoring models and automated accounting solutions, open banking is a solution that can help many different types of businesses creating automated workflows and seamless account-to-account payments. The potential use cases are practically endless.

In a nutshell, open banking enables businesses like yours to integrate the functionalities from the online bank into your own services. That means you can show real-time bank data and skip the extra steps of switching context between the bank and your service. It also means you can integrate seamless account-to-account payments directly into your product. With that, everyone with a bank account can pay and accept payments at the fraction of the price of a credit card payment. 

In this way, working with asset management across borders can be simplified significantly, as open banking allows you to get a complete overview of multiple accounts across different banks and different countries. Instead of having to jump between several interfaces, businesses and consumers are simply able to get all the information they need in one single place.

The same goes for the many services and products that can benefit from more frictionless account-to-account payments that require nothing else than a bank account. One of these services could be pension funds that receive large amounts of monthly payments from customers. Reducing expensive fees, open banking payments allow pension funds to send and receive payments at a fraction of the cost.

But that’s far from all. Businesses from many different industries, including the ones below, can also leverage open banking to create better services for consumers and other businesses:

• Asset management and PropTech  
• Insurance companies 
• Law firms and legal 
• Utility companies (e.g. gas, energy, heating)
• Retail and eCommerce 
• Car sharing and bike sharing services 
   

Want to know more about how you can reduce manual processes and create seamless products and services for your customers? Reach out to us today with your specific use case to get our advice.