Open Banking: benefits of an expanding technology

The journey of digital transition in Banking continues worldwide at an ever-increasing speed. After a series of lockdowns motivated by a pandemic, the importance of digitalization gained even more expressive force. Open banking solutions, in particular, see a fertile ground to grow in the market and are already revolutionizing the relationship between financial institutions and their respective clients.

Very succinctly, open banking involves a technology that aggregates all of a client's financial information, even from different banks, into a single platform. Banking entities thus begin to share client data with other operators, be they competing banks or fintechs, for example.

Recalling the definition of open banking is important because, behind the concept, lies a myriad of benefits, both for banks and for consumers. Let's look at the different advantages of this financial management solution.

Reduction of operational costs

By centralizing all necessary information on a single platform, banks and clients can access, collect and retrieve all data much more easily. Time is saved and, in the specific case of banks, work productivity is higher. Fewer resources are needed for managing client banking information and, as such, costs are also lower.

Consumer protection and security

The sharing of client banking data between different entities can raise doubts. It is understandable. But open banking is duly regulated through two supranational directives, the Payment Services Directives (PSD) 1 and 2, which, among other measures, require certification of providers of these services. Thus, clients can enjoy the benefits of open banking in a secure and authorized data environment.

Ease of payments

With all banking information aggregated and duly organized in a common environment, clients can easily initiate all payments they wish without the need to open multiple home banking sessions for the same purpose.

New revenue streams

By foreseeing the connection between different entities for data sharing, open banking technology favors innovation and digitalization of banks. These entities will be able, for example, to optimize the online client experience, streamline decision-making, and adapt the offer of products and services to each user. This is how profit potential grows.

Control and freedom

The client of an open banking service benefits from significantly greater control over their accounts. They aggregate, compare, and decide on added quality information with ease and accelerate bank reconciliations. Companies themselves gain greater autonomy in managing fiscal, tax, and credit responsibilities, for example, while establishing integrated communication with other entities or professionals.

Try nBanks' open banking solution for free.

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