Open Banking is an initiative which has revolutionized the way we approach finance both as consumers and as an industry. Open Banking may drive the most significant change for the next few years, according to 24 percent of professionals. By revolutionizing open banking, there shall arrive the financial wellbeing, improves customer experience and increases competitiveness. The phrase ‘Open Finance’ emerged here. According to KPMG it is the term used to describe the “extension of Open Banking data-sharing principles to enable third party providers to access customers’ data across a broader range of financial sectors and products”. Banks must look to Open Finance as a way of doing this to future-proof their businesses for the customer of tomorrow.
The Open Banking model has initiated an upgrade to outdated infrastructures and processes within financial services organizations. Financial services businesses need to either replace or upend existing systems for greater digital agility to implement this approach. In this way, Open Banking has been an integral part of digital transformation within banking as well as provide digital flexibility. With our research finding that over half of financial services professionals believe that COVID-19 has encouraged its organization to prioritize digital transformation initiatives. Consumers now have access to account information services means that customers can track and utilize information about their accounts or grant access to third parties as a result of the accelerated development of Open Banking. The decrease in popularity of traditional banks correlates to the rise in Open Banking as consumers change their general approach to banking from legacy to digital. Open Finance is leveraging its services but offering a wider variety of sectors and products by allowing consumers to make more comprehensive financial decisions, based on their entire financial portfolio, rather than just their payments accounts. There can be seen a major shift in the banking sector of France. Businesses have benefited from its service with reduced costs. Open Finance takes this approach one step further with the opportunity for greater possibilities.