Open Finance: The Key To Innovation Across The Financial Ecosystem
The banking sector has seen huge levels of change over the last decade and is now increasingly driven by growing demands for digital services and a customer base that is more prepared than ever to shop around. In 2020 alone, for example, over 700,000 people switched their current account from one bank to another in the search for better deals and services.
The widespread emphasis on customer experience has reshaped the way services across the economy are offered, with consumers using the likes of Amazon and Netflix as a benchmark for other digital brands – banks included. As a result, challengers in the form of Monzo, Starling and Revolut, among others have attracted millions of customers with app-based experiences that are positioned as the antithesis of “traditional” banking, instead putting the customer at the heart of the banking experience.
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Why open banking APIs are so different
Open banking comes with a lot of expectations and promises, such as democratization of Access to Account (X2A), increased competition between banks and fintech’s, and provision of better control to end-customers over their financial data and payments.
To facilitate the adoption of open banking, several API standards incentives were created including Open Banking UK, Berlin Group, STET in France, Polish API, CDR in Australia, and so on. Also, a process of collaboration between API groups has been initiated. However, in the real world of open banking, APIs’ consumers, including fintech’s and banks themselves, have faced a lot of challenges while integrating those APIs into unified product propositions. Why? Because APIs are so different.
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