The Open Banking Revolution: Empowering Customers and Fostering Competition

Open banking is a driving force of innovation in the banking industry in our Digital world. By eliminating centralization, open banking can help financial services customers to securely share their financial data with other financial institutions. For example, open banking APIs can facilitate the sometimes-burdensome process of switching from using one bank's checking account service to another bank's. The API can also look at consumers' transaction data to identify the best financial products and services for them, such as a new savings account that would earn a higher interest rate than the current savings account or a different credit card with a lower interest rate. Open Banking is revolutionizing the way that banks work and offers customers a more customized experience.

What is Open Banking??

In financial services and banking, open banking allows for financial data to be shared between banks and third-party service providers through the use of APIs. Traditionally, banks have kept customer financial data within their own closed systems. Open banking allows customers to share their financial information securely and electronically with other authorized organizations, such as fintech companies, payment providers, and other banks.

Open banking will allow the networking of accounts and data across institutions for use by consumers, financial institutions, and third-party service providers. Open banking is becoming a major source of innovation that is poised to reshape the banking industry. The first open banking regulations were introduced by the European Union in 2015, and many other countries have introduced open banking regulations since.

Why is open banking critical in our digital age?

With open banking, banks allow access and control of customers personal and financial data to third-party service providers, Third-party providers APIs can use the customer's shared data. Uses might include comparing the customer's accounts and transaction history to a range of financial service options, aggregating data across participating financial institutions and customers to create marketing profiles, or making new transactions and account changes on the customer's behalf.

Open banking will force large, established banks to be more competitive with smaller and newer banks, ideally resulting in lower costs, better technology, and better customer service. Established banks will have to do things in new ways that they are not currently set up to handle and spend money to adopt new technology. However, banks can take advantage of this new technology to strengthen customer relationships and customer retention by better helping customers to manage their finances instead of simply facilitating transactions.

Open banking provides greater transparency and data control for account holders, and could allow for new financial services to be provided. Open Banking Supporters also say that it aims to promote competition, innovation, and customer empowerment in the banking and financial sectors.

What are some Open Banking Use Cases?

Open Banking serves a wide range of use cases like:

1. Data Sharing and Data Democratization: the utilization of Open Banking Solutions allow better data sharing for partners and customers as well. Allowing them to make more data-driven decisions
2. Open Data: data that is openly accessible, exploitable, editable and shared by anyone for any purpose called open data. For BFSI Enterprises they can easily achieve open data through Open Banking,
3. Data Value Realization: Data Value Realization Use Case focus on achieving the biggest benefit of the data. With Open Banking Solutions data can be easily shared allowing other parties to have full visibility of the data and make the best utilization of them
4. Freedom of Information: contrary to common belief, Open Banking allows better freedom of Information since it allows customers know what of their data is exposed, especially that Enterprises cannot expose their customers data without their consent
5. Lending and Loans: Open banking could help lenders get a more accurate picture of a consumer's financial situation and risk level in order to offer more profitable loan terms It could also help consumers get a more accurate picture of their own finances before taking on debt.
6. Fraud Detection: Help fraud detection companies better monitor customer accounts and identify problems sooner.

?What are some Open Banking Case Studies?

With the Digital Revolution, many enterprises are implementing open banking solutions as critical part of their digital transformation journey, some of the enterprises who managed to implement an open-banking solution:

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1.Payment Solutions Provider: A British Payment Gateway which has 132 different organizations across England and Scotland using its platform across. Its clients vary from employees, enterprises, and freelancers

?The Payment Gateway discovered open banking when they came across challenges with building their product and needed to meet their objective to offer payments in real-time.

To meet their challenge, they utilized an open banking platform to help it deliver a complete solution to its customers. They have developed a process with existing payment rails they knew worked well with their customers from our proof of concept.

2.SME Banking: By implementing an opening Banking Solution, The solution offered a new way to collect and send payments online and in person, removing the need for sharing and storing card details.

?The Solution offered a good way to engage customers, offering a short demonstration of the solution in action, the bank also shared the customer data after their consent with marketing research firms to learn how they can improve the customer experience. The open banking solution also helped in reliability and security.

3.Commercial Bank: The Bank wanted to process payments within the open banking ecosystem. With specific consent from users, so they can initiate payments directly from customer's bank accounts, allowing for a frictionless user experience when buying products and services online.

?With the open banking solution, the customers can pay easily using their bank cards and all the details will be shared with the business who is receiving the payment instantly, also using APIs business managed to learn more financial information about the customers and helped them make better buying decisions.

How United Delta can help your bank implement a successful open banking strategy?

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United Delta is one of the leading Data Solutions Services Providers globally, by working with the top-notch API Management Gateway vendors United Delta has helped dozens of Banks in Europe, North America and the Middle East implement their Open Banking Solution using APIs and Reusable APIs. United Delta implements the concept of open banking to enable banks provide access to user financial data to players in other industries to 1) foster a?competitive environment between larger and smaller companies and 2) improve customer experience. As users consent to share their personal financial data, banking institutions, we can distribute information via open application programming interfaces, or APIs for short, allowing third parties to leverage this data and create personalized services with a seamless user experience. Our solutions banks can easily generate, design, monetize, analyze and manage their APIs making it easy to share their customers Data upon their consent with 3rd party entities, to learn more about how we can help you implement an open-banking solution please contact us at: [email protected] or simply go to our website: www.uniteddelta-me.com

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