The competitive landscape in banking has led many banks to offer their customers what are known as open banking services.
Open banking allows customers to access services offered by financial institutions other than their home banks. Through the use of application programming interfaces (APIs), banks can invite third-party providers (TPPs) to access customer accounts and tailor services to their clientele based on the data they have mined. The specific benefits of open banking to you include more options and more highly customized services.
Open banking allows you to conduct e-commerce and other transactions directly through TPPs without the need for your home bank to do it for you. While banks traditionally have provided many of these services, the scale of their offerings has been limited compared with the array of services available through open banking. Similarly, open banking eliminates the need for you to rely solely on your bank for financial advice. Open banking offers many more choices of service providers, meaning that you are no longer tied to a particular service just because it’s included with your account. This approach allows banks to continue as the depository for your money while offering you more services than would otherwise be possible from a single provider.
Open banking gives you a greater role in tailoring bank services to your specific needs. With the access that open banking grants to them, third-party providers can introduce customers to a new level of customization and personalization. As just one example of the types of services available, some open banking platforms allow you to synchronize your bank account to payment information services like Olivia AI, which can help you track income and expenses more effectively than you ever could through your online banking services.