The future of finance is continuously moving in the direction of making itself more invisible to the proverbial ‘naked eye’ of the end-user. While financial services are, at the same time, becoming more omnipresent in our daily lives, Open Banking is one of the greatest transformational engines of this trend, due to its ability to enable users to receive more ownership of their data. This development through Open Banking and finance allows users to ‘demand’ that the data is made available, and ‘forces’ banks and other financial institutions to do so. This fosters healthy competition, and when combined with advances in technology, it gives the opportunity to generate new business models, products, and services in the market.
On the other hand, Open Banking gives users full ownership over their data. For financial institutions, as well as for a range of other companies, this means that they have to build up a connection of trust with their customers and use their entrusted data to deliver real added value. From this need for more trust between financial institutions and their customers comes the growing need for ‘embedding’ services like finance. This is a generational opportunity, which enables new emerging markets that are projected to make up a USD 3.6 Trn market share by 2030, according to a recent analysis from Simon Torrance and Bain Capital.
Additionally, with the ‘opening’ of financial technologies, accessing banking data is becoming a commodity and the real value comes through combining that with additional financial data. This is where Open Banking moves towards Open Finance. We are only at the very beginning of the future where access to payment accounts and payments is available to just about any third party. In the future, this will be possible for all types of financial data, for all financial products and transaction types. At finleap connect, we see several promising use cases emerging in future, many of which are problems we are currently solving.
Breaking all the barriers to change your bank
The biggest pain point when opening a bank account with a new bank is transferring all your history with you to the new bank. Transferring your direct debits can be lengthy, manual, and frustrating. Open Banking allows users to identify their current providers and notify them about the new bank account in a ten-minute process.
Speeding up the loan request process
When asking for a loan, you need to submit tons of information so the lender can assess your creditworthiness. This makes the process cumbersome and lengthy. Open Banking allows a hassle-free and real-time process that reduces friction while speeding up the process for the benefit of the client.
Getting better and more accurate financial advice and support services
As users can share their financial data and personal information more easily via Open Banking, this allows them to receive consultation and advice more tailored to their current living situation on how to better handle their finances, as well as get better and more affordable services.
Open Banking as the basis for payment services
Based on Open Banking, new ways in payments are allowing clients to have more payment options that better suit their needs. In this context, convenience and speed are often critical, and in tandem, merchants are constantly looking for ways to reduce the payment cost while increasing their conversion rate & ticket size at the checkout. Payments using bank account transfers (or Payment Initiation in the Open Banking definition) is creating a significant impact by providing value to all sides, with the combination of low friction and high convenience.
In our opinion, some of the most promising and innovative Open Banking use cases have to do with enabling end-users to decide who does what with their financial data while also solving some of their everyday challenges – all while remaining ‘invisible’ in the background. At finleap connect, we use our Open Banking platform of efficient solutions to make it possible for our clients to put their customers and their financial data in focus – making financial services and Open Banking transparent and innovative.
This article was originally published inside the Open Banking Report 2021. To download the report, please click here.
About Katja Hunstock
As the CPO of finleap connect, Katja Hunstock leads finleap connect’s Product Organisation team. She carries the responsibility of defining and leading product strategy and vision in order to realise the international growth plans of the company’s Open Banking platform.
About finleap connect
finleap connect is the leading, independent Open Banking platform provider in Europe. With its ‘full-stack’ platform, finleap connect makes it possible for its clients to compliantly access the financial transactions data, enrich said data with analytics tools, provide digital banking services, and deliver high-quality, digital financial services products and services.
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