DIGITAL BANKING
How might open banking reshape society ’ s relationship with money over the next decade ?
Barath Narayanan Open banking has the potential to revolutionise how we interact with our finances by giving individuals more control over their financial data – but we have miles to go !
The fundamental premise of Account Holders also being Owners of their Account Data and have control to share with other Service Providers is a powerful notion ; however , several factors have to align for this vision to materialise across geography ( as it relates to domicile of the Account ), local regulations with respect to open banking , standardisation of information interchange ( of different financial services ), service provider infrastructure and that of the related Banks .
While the EU may have had a headstart with the US recently passing regulations and appointing a nodal body for data interchange standards , Open Banking is a work-in-progress across geographies .
Carlos Kazuo Missao One of the main purposes of introducing open banking is to make the financial system more accessible to the masses .
While accessibility may look different from country to country depending on the state of the economy , open banking at its core will enable businesses to break down previous financial barriers .
In more mature economies , this will take shape through new relationships between consumers and their financial data .
Historically , consumers have had minimal control over how they receive and can access their data due to silos within individual financial institutions and between organisations .
Open banking will break down these barriers , opening up data sharing between financial service providers , businesses and consumers . By combining all of this data in one place , consumers will have heightened visibility into their personal financial standing .
For developing markets , on the other hand , open banking will make financial access more attainable . On the consumer side , it will make opening a bank account faster and easier by giving financial institutions the data they need at the push of a button .
Fintechs will also benefit from these enhanced data sharing capabilities , gaining access to secure , permissioned insights from financial institutions that will enable them to bring more inclusive financial offerings to market .
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