If you’ve been wondering if this is true for the world of finance, the answer is yes. There’s a game-changer service called open banking. We’ll get into more detail below and tell you how it’s changing financial services in 2024.
What is open banking?
Firstly, let’s start with the definition of open banking. In simple terms, open banking is a financial service that lets you share your information with other services.
For example, you can give access to your details with just one click to a bank you’re trying to get a loan from. So you won’t have to go through the hassle of looking for all relevant financial information, as it will all be stored in one place.
Who is an ideal user of open banking?
If you’re wondering who is an ideal user of open banking, there are several answers. Firstly, anyone wanting to revolutionize how they handle their financial operations, from businesses to financial providers. An ideal user knows that digital solutions can change everyday operations.
Also, any tech-savvy individual who is interested in new financial tools. Lastly, businesses that want to provide their customers with the best service learn more about their needs so they can improve their offer.
What are the benefits of open banking?
Open banking benefits businesses and regular consumers in different ways. Overall, it’s a great way for both parties to streamline payment processes and even pay less for fees.
For example, there are payment apps in Australia that allow users to reduce their merchant fees by up to 80%. Such payment apps use open banking features to allow their users to cut their costs. Obviously, this is an amazing benefit, so let’s see what other ones there are.
Accessible financial information
Open banking allows users to better understand their financial data. Financial information is consolidated in one place, offering a better overview of the data. So, if you want to improve your money-spending habits, you can analyze your financial data and understand your spending patterns.
Simplified transactions
Different financial solutions use open banking to simplify users’ transactions. We’re all aware that banking fees are on the rise, so using a service with a flat fee or that offers lower fees is a savvy decision. You will reduce the time spent processing a transaction.
Also, you’ll be able to pay directly from your bank account through third-party apps of your choice. Thus, your payments and purchases will go through faster, and the fees will be lowered.
Personalized financial offers
Another benefit of open banking is receiving personalized financial offers. Since your financial data will be accessible in one place, financial institutions and fintech companies can offer you personalized offers. For example, you can get a personalized offer for a loan or a savings account with better interest. You can also learn about different investment options, securing your financial future along the way.
Similarly, as a user, you’ll be curious to learn about new financial tools that help you track your spending. Lastly, Third-party apps relying on open banking can give you personalized solutions and suggest ways to help you achieve your financial goals
Streamlined information
Today, many people are juggling several accounts at once. If there is more than one account, there is more than one tracking spreadsheet. Thus, if your goal for 2024 is to streamline everything in one place, there’s a way to do that.
With open banking, users can be more efficient in managing their finances. Financial management is not only a skill, it’s also a decision to use tools that enable you to streamline your operations. From budgeting tools to automatic expense tracking, staying on top of your finances has never been easier.
Easier process of applying for a loan
Everyone who’s done it says that the process of applying for a loan can be quite complicated and lengthy. The reason behind this is simple – there are many different providers, and various documents are required. So, if you apply to every one of the available providers on your own, you’ll have to submit all of these documents several times.
But, if you rely on a third-party app that uses open banking, the required documents will be accessible in one place. As a result, users will potentially increase their chances of getting access to better credits and loans.
Its secure and controlled
If you worry about the security of your data, you should not worry. Open banking services are strictly regulated, and your data is protected. Privacy and security are at the core of open banking services, as there are rigid rules when it comes to using or handling personal information.
Most importantly, users are those who control who has access to their data. They can allow third-party providers to access their data and revoke that permission anytime.
You can compare and contrast different services
Individuals must have access to information to make informed decisions. For example, if you want to get a loan, you’ll want to compare and contrast before choosing a service provider. So, open banking makes comparing financial products and services easier than ever.
When you have access to comparison websites and apps, you can make a better decision based on accessing all relevant information.
other valuable tips from our business blog (new win):
What Are the Benefits of Getting All Your Banking Services at a Credit Union?
It fosters competition and innovation
There is no competition if every financial service offers the same or similar services. Thus, a person won’t have a choice but to conform to the current market. However, when there’s innovation, like open banking, it also fosters competition within the financial industry.
Such a new service can only be an incentive to banks and fintech companies to work on better and improved financial products and services. This is the only way to attract new and retain existing customers.
Ultimately, open banking empowers consumers by giving them more control over their financial data and decisions.
Image Credit: by envato.com
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