Article: Open Banking Paves the Way for the Democratization of Financial Services

Money, Open Governance

Open Banking Paves the Way for the Democratization of Financial Services

Open Banking has dramatically changed the way people and businesses manage their money, leading the democratization of the financial services market. Traditionally, a select group of major banks have controlled all the financial data of their customers, making it difficult for new, innovative fintech and financial services providers to break into the market.

Now, Open Banking is putting the power of financial data back into users’ hands, transforming the financial services industry as we know it. Popular apps like Venmo, Mint and SoFi show the value Open Banking can bring to consumers when they can more easily manage and transfer funds.

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Article: What Open Banking Is and How It Will Affect You

Money, Open Governance

What  Open Banking Is and How It Will Affect You

Open banking is the practice of sharing financial information electronically, securely, and only under conditions that customers approve of.3 Application programming interfaces (APIs) allow TPPs to access financial information efficiently, which promotes the development of new apps and services.4 Ideally, open banking should result in a better experience for consumers.

You may already use services that open banking would improve upon. For example, third-party personal financial management (PFM) tools like Mint use your bank account information to help you track spending and reach other goals.

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