Among the new financial terms bandied about of late, you might have heard of open banking. But would you be able to explain what it is? We’re going to try to explain it to you in this post so that you can use it if you’re interested!
Open banking refers to the sharing of information with third parties digitally, securely and under conditions that customers expressly authorise. Naturally, just as you gave your consent, you can withdraw it later.
This is possible thanks to the new European directive on payment services (known as PSD2). This directive aims to make payments in Europe more secure, improve consumer protection and promote payment-method and e-commerce innovation, thus driving banking services’ adaptation to new technologies.
Yet you’ll wonder about the purpose of sharing your banking data. Data openness means that you can now use applications provided by account information service providers, which allow you to see all your financial information on a single platform, even if you bank with various institutions. Less paperwork and fewer formalities, quicker access to credit, better financing and investment conditions and offers better tailored to your profile are other advantages.
But that’s not all. Opening this information up to other firms, such as department stores or telecommunications operators, to provide tailor-made products and build customer loyalty is on the cards for the future.
Open banking is a new approach where the owner of the data isn't the bank but the customer, and they can freely decide to share them with a third party to receive a service. Only you can assess and decide whether this could be useful to you. To do so, as we always advise, read the documentation you sign very carefully.