Open banking will use APIs (Application Programming Interfaces) to share customer information securely. The information and data that banks hold can be used by providers such as alternative business funders to make faster decisions with faster outcomes for the customer. Banks have never made the full use of this information and instead have found themselves at a disadvantage to that of the alternative finance sector who themselves have produced innovative lending solutions which will benefit from access to the open banking scheme.
Is it good news for customers?
Yes, it certainly is. Open banking allows lenders to access information otherwise difficult to receive.
Is it confidential and secure for customers?
Yes, Open banking will mean that personalised financial advice or products can be tailored to your specific requirements, this being delivered securely and confidentially. It is also a confidential and secure way for parties to access such data. Open banking will give more transparency to the options available to the customer.
Open Banking will benefit small businesses and SME’s seeking finance.
By the very nature of open banking, the more information a lender can access and the speed of such acccess, the better all around. What it also means is that Fintech firms can design new products to tap into this data and create unique propositions for the alternative finance sector.
Our Business cash advance product may allow greater transparency for speedy, informed decisions. All in all open banking will enable customers more insight and control over their money management. The central banks will be unnerved about OP, mainly as their competition and especially alternative finance providers could offer customers better-personalised solutions and offers.
One such app currently giving users the control they crave is ‘Yolt’ by allowing users to view multiple bank accounts and credit cards all in one place.