Open Banking: The Incoming Revolution in The FinTech Industry

What is Open Banking?

The term open banking generally means the sharing of financial information electronically, securely, and only when the customer approves of it. Application Programming Interfaces or APIs allow third-party providers (TPP) to access such information and use it for the development of new applications and services. In a nutshell, the ultimate aim of open banking is to provide a better experience to the customers.

How is Open Banking Proving to be Revolutionary?

Open banking is being considered as one of the striking sectors in the FinTech industry. It has allowed banks to ‘open up’ and we acknowledge the Payment Services Directive (PSD2) for bringing this change. It has introduced AISP and PISP in the field and they’re all set to turn the landscape of traditional banking.

  • Account Information Service Provider (AISP)
  • Payment Initiation Service Provider (PISP)
  1. Banks can easily connect to the APIs of the other service providers in the market by opening their APIs and also expand their offerings to the customers.

Should I Shift Towards Open Banking?

Yes. You definitely should. With the blink of an eye, open banking is going to change the face of the finance industry. Due to the current obstacles being faced by traditional banks, they will be forced to make the move, while the FinTech industry would surely adopt a model which will simplify their regulatory and compliance requirements. And for a customer- it’s a win-win situation as there would be more affordable and customized services, more convenient operations with financial tools, lower costs, and increased efficiency.

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Nitin Gupta

Nitin Gupta

CEO at Webmob Software Solutions and Corda certified developer