Open Banking (OB) ..WHAT…HOW…WHY NOW?
In many countries, Top 3- 4 banks are having banking accounts(A/C) of the entire banking population.
Bank customer has a sticky relation with his bank as many things is linked to his bank A/C (Salary A/C, Credit Card..)
The customer has also given his bank A/C to many other utility companies (Electricity, the gas company..to pay bills from his bank A/C).
It’s difficult for a customer to switch A/C from his current bank.
In many cases, these Top banks are still running old legacy systems. They are slow to offer a new innovative solutions to their customers.
Result: Customer is not able to avail of new features.
OB will mandate banks to share the consumer data( after his consent) with third parties(TP) via APIs.
With this, TP can develop more features on top of the existing features offered by these TOP banks.
More choices for a bank customers.
But watch out for these points
1.Old bank will have to invest a lot of effort to offer APIs from their legacy systems.
2.Privacy/Usage of Customer data.
3.Each country is coming up with its own API specification. European country’s OB API specs are different from SEA countries or ANZ.
No global standards for common banking operations.
