Finance - Open Banking

The financial world is facing a new era, the extent of which cannot yet be realistically estimated. A change of direction that attacks the traditional self-image of banks. Away from the rigid fetter of perseverance, towards new flexibility, which internationally operating market operators and market participants hope for. In fact, the wishes and requirements of customers and their consumer needs are the focus of developments. A perspective that allows financial service providers to position themselves innovatively which definitely represents a new challenge. The compass of the European Union undoubtedly points in the direction of intensifying competition. With the Payment Services Directive II (PSD II), nothing stands in the way of opening up the banking infrastructure and it replaces the voluntary nature in favour of the binding commitment.

A provider who initiates and partially controls the payment process via API primarily benefits from the acquisition of information. Knowledge about the customer, which goes beyond the necessity of the pure sales or service process. This will result in a set of rules that is more than just the administration of customer data. In the future, those who have control over the information will shape and control the market. The new currency at the financial centers is knowledge of customer behavior. There is no question that nothing is more valuable than information about it,

has bought or statistically would like to buy it.

With Open Banking, banks give third-party providers the option of accessing customer data and triggering transactions on bank accounts. The customer, in turn, has access to a number of services under one interface. This new type of customer-friendliness has the advantage that all bank transactions can now be handled flexibly and with greater convenience. Several accounts can be managed within one application. For this purpose, third-party providers for payment and financial transactions (FinTech companies) offer apps that can access existing bank details via APIs. Through these API’s comprehensive availability of the bank data is possible for all other providers. For customers, banking and management of external financial data and services will become simpler, more versatile and more innovative.

An app offered by a third party (FinTech) can be used by the bank, the app provider and the customer. In the future, customers will be able to complete all their financial transactions and integrate additional services on a single platform. The configuration of such frontends is largely carried out by the customer himself. For the providers, usability (user-friendliness) is the main focus, while the complex networking of all data determines the development process in the background in order to provide the various services.

Depending on the bank details and additional services, the platform can be set up under the banner of Personal Finance Management (PFM):

Through intelligent networking through APIs, all services are connected to each other and are in direct exchange. Banks are transforming themselves into market designers and flexible service providers, opening up new and innovative business fields.