Support Small Local Business, 20 Ways to Do So!January 12, 2021
How Open Banking Works?November 26, 2021
Open banking, also known as “open bank data,” is a term used to describe a banking practice that involves sharing consumer information – account balances, transactions, financial products and services, online banking usernames, and passwords – with third-party financial technology companies. These companies are often referred to as Fintechs or Fintech Apps, and access consumer data through the use of application programming interfaces (APIs). Open banking is available in countries like the UK and Australia but is not yet fully available in Canada or in the USA. It is considered by many to be at the head of a “global banking revolution.”
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How Does It Work?
Most Fintech apps are designed with one goal in mind: to help customers streamline their banking processes. The first step to open banking is selecting a Fintech app that suits the consumer’s particular needs. After selecting the right app, the software will then prompt the user to link their bank account, syncing up financial data. This step generally requires the consumer to officially consent to share their information.
Fintech companies provide apps accessible via phone or tablet that offer more personalized, action-oriented services than those provided by regular banks. Your banking information is securely shared with the Fintech App, which allows access to a multitude of products and services. Examples of features offered by Fintech companies include, but are not limited to:
- The ability to view all accounts from multiple banks in one place
- Advanced and personalized budgeting tools
- Product comparison capabilities
- The creation of a user profile to better achieve your banking goals
Why Should I Choose Open Banking?
Canadians, Americans, and individuals from other countries where open banking is not fully supported have little to no control over their financial information. open bank data allows users to share personal financial data securely and at their own will. There are myriad reasons why an open bank data system is beneficial for its users. Here are just a few:
Greater financial transparency. So much of what happens with our money in banks occurs behind closed doors. With open banking, users experience an unprecedented level of financial freedom, transparency, and the ability to do more with their money.
Better banks. Open banking will encourage enterprise-level banks to up the ante. Competition between big banks and smaller, newer start-ups will rise, resulting in positive changes across the board – better technology, improved customer service, and ideally, lower costs overall.
The ability to do more with your money. Shifting the power from big banks to smaller, younger, creative start-ups inspires the creation of innovative new apps. open bank data apps can help with things like automatically calculating budgets, predicting future patterns, and even allowing for voice-accessible services for the visually impaired. When it comes to open banking, the opportunities are endless.
Open banking is not just a possibility. It is the future of banking in Canada, the USA, and across the globe. As part of Kapital’s innovative solutions, we have developed Kaptrak: our customizable-to-your-business-model open banking solution. It is a digital platform that harnesses the most comprehensive set of bank and payment data in the industry. Kaptrak grants access to account transaction details to make informed decisions on risk and schedule payback. It provides seamless integrations to structured data and validated models to improve account openings, credit decisions, payments, fraud, risk, and compliance objectives.
Institutions and businesses can leverage Kapital’s true end-to-end open banking solution, from data analytics with Kaptrak to digital payments by Kapcharge, to enhance their offerings and gain competitive advantages. Request a demo and get in touch with one of our team members at Kapital Solutions today.
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