Open Banking API:
Data sharing and big data have been the hottest topics in finance banking lately. With the arrival of many Fintech companies, traditional banks are undergoing a major change. Now they can’t wait to change jobs to survive the important competition from their peers. It was then that the idea of Open Banking began to spread in the banking industry.
What is the Open Banking API?
In fact, it’s foreign trade: go outside the four walls of the bank for better service.
The concept is based on the connection of computer systems by a common digital language shared by an API (Application Program Interface).
Open banking is a term for financial services as part of financial technology that refers to:
Use of open APIs that allow third-party developers to build applications and services around the financial institution.
More financial transparency options for account holders, ranging from open data to private data.
Using open-source technology to achieve the above.
Therefore, “Open Banking is the opportunity to create new businesses and digital ecosystems through the APIs provided by banks”.
This increases the transparency about the accessibility of data for end customers. It will also help Fintech companies and other third parties develop and build financial applications. This will help banks and other financial institutions look beyond their own businesses and make innovative advances in end-user services.
How did the term ‘open bank’ come about?
Open banking was developed from the idea of Open Innovation, conceived by Henry Chesbrough, Head of Open Innovation at the Haas School of Business. He had the idea that information or knowledge does not belong to an entity and that it must be shared. This concept was later adopted by the banking industry as ‘Open Bank’ to innovate the way they work and provide customers with a holistic banking experience.
Shared part: the journey so far
Until recently, your financial history was carefully preserved and protected by your bank. Your data can only be obtained if you use your debit or credit card for certain transactions through payment processors. Therefore, unless you are officially certified, you will not be able to access anyone’s banking history. However, your bank details should not yet find a way to contact other companies that you can use for business promotion. How could that be, you wonder!
The only way to find out your financial history was to scratch the screen. You do this by getting your credentials and using them to log into your account to get the necessary credentials. This was not only dangerous and risky but also very inconvenient because the company gives access to your most confidential information (which can also be misused) and can even lead to your account being blocked (if suspected).
Bank API available to save!
To give customers control over their data, banking institutions are increasingly adopting recent technologies that share banking information through third-party APIs. It is a durable model that is not only reliable but also safe.
On the other hand, such complaints may cause conflicts and require strict management and policies to control the technical aspects of such an agreement. In addition, these data-sharing systems require high-level controls and infrastructure barriers to limit data privacy.
Open Banking: Inbound Trading
This isn’t just pension negotiations; Open Banking also processes incoming transactions. It’s also about continuing to market the right third-party products and services (TPP) in your offering. The launch of a full suite of products and features improves the personalized customer experience, increases retention, and also lowers the bank’s operating costs.
By adding Open Banking through “banking and non-banking” products and features, banks can extend their services beyond the “traditional zone” and extend their approach beyond financial services beyond “full integration”. Travel to the bank.
Teknospire, a FinTech company, has advised several banks and financial institutions in several African countries (Zimbabwe, Mozambique, Zambia, South Africa), India, Nepal, and Bangladesh. The mission and the vision