Weekly Update November 8th, 2020
On top of tracking financial institutions providing open banking services, the OpenBankingTracker has also begun tracking TPPs and will look to broaden its coverage over time.
Open Banking Use Case Spotlight: Open Banking Lending w/ OakBrook Finance
When open banking comes into play, lenders can use live financial transaction data gathered from someone’s bank account with their permission and enable brokers/lenders to speedily assess risk and affordability, thereby allowing them to issue loans responsibly.
Open Banking Use Case Spotlight: Open Banking Enabled Payments
PIS essentially allows users to pay directly from their bank account — meaning TPPs can process payments to anyone with an approved bank account. Instead of complicating the customer conversion process with account creation and asking for bank details, PIS offers seamless integration with a network of regulated banks
Open Banking Use Case Spotlight: Open Banking Credit Checks w/ Freedom Finance
Credit scores are a way lenders price risk to borrowers. The issue is, historically the risk is tied to your credit cards and utility bills, which typically impact the most vulnerable of society more than any other segment. This bifurcation increases the divide in society, having a more dynamic and intimate credit scoring tool allows people's actual credit profile to be holistically viewed rather than in a black or white manner.
What are the business models for open banking?
Globally, open banking regulations have been introduced to widen competition and create new consumer choice. Other goals were also in place: Europe wanted to create a level of interoperability for European citizens that makes it easier for them to manage their banking across EU country borders.
What are the use cases for open banking?
For open banking to expand, understanding the potential use cases and being able to build viable products that leverage new use cases will be at the core of any momentum.
Open Banking Use Case Spotlight: Wealth Management w/ Plaid
As these apps become more prevalent and offer an ever-expanding suite of services, the wealth management industry can make account information available through APIs, which means that users could access their checking, savings, mortgage, and investment accounts from a single application. Non-connected accounts will seem archaic and cumbersome to use by comparison.