How is Open Banking Paving the Way to Open Finance?

https://thefintechtimes.com/how-is-open-banking-paving-the-way-to-open-finance/
https://thefintechtimes.com/wp-content/uploads/2022/05/Sara_Costantini_CRIF-1-150x150.png?#
Sara ConstantiniSara Constantini
Sara Constantini, Regional Director for the UK & Ireland at CRIF Decision Solutions

Sara Costantini, Regional Director for the UK & Ireland at CRIF Decision Solutions thinks Open banking has changed the way we view data.”

She continued: “Now, it is something that is understood as owned and controlled by customers, and subject to their permission, can be shared to power new innovations in financial services.

“In 2022, we are seeing real momentum in the finance industry, with the industry beginning to understand the power that this level of transparency surrounding data provides.

“Excitingly, open banking also opened the door to new opportunities around data transparency. Our next task as an industry is to deliver open finance, going further and extending data sharing and third-party access to a wider range of financial sectors and products. For example, making better automated financial advisory tools possible, which can see the entire picture for consumers and businesses, and even transparent and automated ESG scoring or recommendations. Each of these opportunities requires not just the regulatory framework, and connectivity ecosystem, but also advanced algorithms, utilising the best in AI to first understand the ever more diverse datasets, and then to also turn these into meaningful and easy to understand outputs. Our ability to make informed decisions will depend on tools that can convert this data into both digestible and useful information. We believe that these are best presented using natural language outputs that reduce the learning curve and assist easy adoption.

“As open finance is implemented, the industry has the collective responsibility to ensure all these different pillars advance at the same speed and support each other to deliver on the potential of this new era in data access.”

forwardaiforwardai
Nick Chandi, CEO, Forward AI

Nick Chandi, CEO and Co-founder of ForwardAI 

“With rising customer expectations and the demand for better and more convenient digital experiences as the key driving force, open banking is only the leading point of what would soon become open finance. In the final report from the Advisory Committee on Open Banking in Canada, it stated that “there is a growing acknowledgement in jurisdictions across the globe that consumers have a right to use and move their data in ways that benefit them.” Canada is no exception as well, with a goal to establish open banking in January 2023 and its recent appointment of Abraham Tachjian as the Canadian open banking lead.

In Plaid’s 2021 survey on fintech use, 88 per cent of US respondents said they use technology to manage their finances. This jumped from over half (58 per cent) of respondents in 2020. The momentum in digital adoption has already begun, and financial institutions are in a race to provide more personalised financial services. Open banking allowed financial institutions to learn and understand how to establish working, compliant infrastructures and partnerships to deliver a better customer experience. With the market demanding more, open banking will ultimately pave the road down toward the goal of open finance.”

Daniel Haisley, EVP, Innovation at ApitureDaniel Haisley, EVP, Innovation at Apiture
Daniel Haisley, EVP, Innovation at Apiture

Finally, Daniel Haisley, EVP, Innovation at Apiture said: “Banking is at the centre of the world’s financial system, where value is stored on a series of ledgers that are constantly being accessed and updated by participating parties. Until recently, those parties have been limited since the barrier to entry has been high — primarily due to a lack of interoperable standards between core banking systems, digital banking platforms, payment providers, and other entities.

“The Financial Data Exchange (FDX) is tackling this issue by creating and promoting a standard for data sharing, the FDX API. As use of this standard becomes the expectation — if not a regulatory requirement — in financial services, we’ll see an acceleration of the pace of innovation in the banking space and all the downstream industries that comprise open finance, such as insurance, retirement accounts, mortgages, etc.”

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

https://thefintechtimes.com/how-is-open-banking-paving-the-way-to-open-finance/