Time and again we have positively accepted #Open creativities… be it when Philosophers guided us to have an open mind, Human resource [HR] representatives insisting on Open Communication or the new education system that does not mind in conducting open book test. Being #Open has helped, and this novice initiative – Open Banking is about to set new benchmarks of innovation in the financial service industry.Placing customer at the heart of the banking model, the concept is going to disrupt the banking ecosystem and age-old monopoly. As API’s turn to be the heartbeat of digital banking, the innovation would further disrupt banking services and business models.
Open Banking or PSD2 – The Consumer and Expert Views
The new directive called PSD2, which came into force on 13 January 2018, was welcomed with mixed emotions. In fact, a survey conducted found that 92 percent of respondents hadn’t even heard of it. Other polls suggest people see the idea of data sharing scary.
The Finanser covered the significant headlines of the media across the globe and here is what it says –
However, experts like Imran Gulamhuseinwala, head of Open Banking Limited, the non-profit coordinating the system, admits that “it’s going to take a while for us to see new, very different services.” But, he says, once the system’s up and running, “it’s going to be revolutionary.” Many across the industry agree.
Another expert from the industry John Gibson who pitched OpenBanking to Treasury says -“I told them, it would be like the App Store but for banking.”
While consumers are worrisome to adapt to an open-ended channel, professional believe 2018 would be the year when PSD2 would transform banking. So, let’s dive deep to know how Open Banking could renovate the way we move and use the money.
Open Banking Trends to watch out for in 2018
If you are new to Open Banking or Open API or Open Data or PSD2 (Second Payment Services Directive), please read our previous article that may help you to know about Open Banking and Customers Perspective to Open Banking.
PSD2 is about to provide new dimensions to Banking services with a core aim to help consumers and yet profitable to the banks. Open Banking concept is loaded with –
Improved banking opportunities
For interoperability and provide more customer focussed banking services, it is necessary that customers can operate/avail a banking service without having their presence in a particular bank. Open Banking would allow a customer to avail other banking services if they are cost-effective without the need of opening the bank account.
Transparent Payment systems
How do you know if the monthly shopping at local grocery store saves you more via a debit card of ABC bank or credit card of HHH bank? With publicly accessible data it would help third parties or even let user compare amongst the best possible payment options.
Users could send money directly to their family, friends or even for donation without interference from the bank.
Evolution of Open Data Standards, Open API Standards, Governance and Security
A new framework would evolve dictating the data, API standards that need to be followed at the global level. What kind of security measures and governance is required to support Open Banking? While on the one hand, we might be looking for standards, on the other we also need them to be flexible to accommodate the innovations.
Alliance between banks and fintech
With Open API concept, Banks and fintech firms could work more closely. While banks get the benefit of strengthening their digital platform, fintech firm gain the customer base and trust. A balanced strategy helps banks to shell out customer focused products and solutions combined with latest technologies.
Possible Use cases of Open Banking/PSD2
If you are keen to explore how these use cases could be executed, do contact us here – firstname.lastname@example.org or +91 80 4951 8396. We @Teknospire have an experienced team to help you with your Open Banking or PSD2 implementation.
- The disappointing arrival of Open Banking … and the optimistic future
- Data sharing and open banking
- To change how you use money, Open Banking must break banks
- What is Open Banking and PSD2? WIRED explains
- Open banking – the invisible reform that will shake up UK financial services
- Open Banking Plans For A Big Year — Even Where Regulators Aren’t Forcing It
- 2018 Fintech Predictions: Bitcoin rises, the High Street cracks, and Open Banking booms
- PSD2 Image – Key Points From The Payment Services Directive 2 (PSD2)
- The Open Banking Revolution Is Imminent
- The Open Banking Revolution Is Imminent
- Identifying API use cases