The Open Banking Tracker is launching openbankingusecases.com, an app store covering the various use cases made possible by open banking and the companies implementing them.
We've been mapping the open banking landscape since the launch of PSD2 in 2019, and the Open Banking Tracker has grown to track over 2800 banks and 430+ TPPs.
Over the last two years, we've seen massive growth of the ecosystem, with companies entering the space to offer innovative solutions to old problems. We realized that a missing piece of the Open Banking puzzle was a centralized directory showcasing how this technology creates value and unlocks new customer experiences.
Our team compiled a list featuring many of the prominent players for our Use Cases Directory. Below, you will find the various use cases we’ve identified, from account aggregation apps to smarter credit scores and even adding a gambling block to your bank account.
Discover the full potential of the Open Finance ecosystem.
Are we missing use cases? Let us know!
By linking directly to your business's current account using the Open Banking framework, these companies can actively file revenues and expenses using AI and other value-added services to make running your small business easier.
Getting an auto loan used to be a cumbersome process. A borrower would typically need to provide all of the credit details to a service that would then pull a credit score and verify income to gain a picture of the client's creditworthiness. Now, using the open banking framework, auto loan providers can directly access a client's banking information just through them agreeing to share the data. With no extra work involved, the lender can decide based on AI algorithms on the applicant's creditworthiness.
From gaining insight into customers' behavior, actively managing payroll and HR, and even giving employees specialized perks for working at a company, Open Banking helps modern business leaders manage the company better for all stakeholders.
The B2B payment space is a multi-trillion dollar market. Open Banking uses APIs connected to SMEs' banking account to facilitate faster payments globally, reducing the liquidity burden of selling to somebody across the globe.
Buy Now, Pay Later
Buy now, pay later schemes are not something new; they have been around in the form of store credit cards for many decades. Nowadays, startups are using open banking to revolutionize how BNPL works by providing consumers the opportunity to delay payments on just about any good.
Card Linked Loyalty
Having a rewards card to a frequented store is an excellent way to build consumer loyalty. Open Banking supercharges traditional loyalty cards by allowing merchants to give their customers customized loyalty rewards based on spending habits and enhanced data.
Accessing liquidity is vital for a business's survival; thus, setting up the company's financing is a crucial and time-consuming step that involved going and talking to your banking advisor and applying through their system. Using Open Banking, lenders can now look directly at the business’ cash flows to determine creditworthiness and the amount of credit to extend. Reducing the amount of time it takes to complete the entire process and using AI to decide each case's best financing solution.
Whether for large or small amounts, using the Open Banking framework, fintechs can look at the user's cash flow and payment history to determine creditworthiness and make a lending decision almost instantaneously.
A person’s traditional credit score derives from a few categories of payments a consumer makes throughout their month to show that they are responsible with their money. In contrast, credit scores using Open Banking now include rent payments and other recurring bills so that better credit accessible to more people.
Using Open Banking, a debt collector can look into the accounts of the person that is behind on payments and try to generate a payment plan that the debtor can abide by to pay off the remaining amount.
People who feel they might not resist the urge to gamble could use the Open Banking framework to request their account providers do not allow them to deposit money into services with a gambling-related account code in the system, thereby decreasing the ease of access to those platforms.
Companies in this vertical include: Monzo.
Using Open Banking, investment brokers can allow users to enter orders from external applications or allow super apps to aggregate all of the customer's information in one place, including their investment portfolio.
Factoring is when a company sells a good or service and will receive payment in the future, but they need cash more quickly, so they borrow against their accounts receivable. Using Open Banking, a small business can now provide direct access to their accounts for factoring companies to understand the company's cash flow position and make a lending decision.
Traditionally, a mortgage application is a cumbersome credit checking process that is labor-intensive for the applicant to fill in all necessary information and is labor-intensive for the lender to verify all the applicant's data. Open Banking can give the lenders direct access to the applicant's history to confirm whether they have sufficient creditworthiness to undertake the mortgage obligation.
The payment processing space depends heavily on Open Banking because a company can instantly verify if clients have the money they want to send in their account, reducing the payment processing company's risk.
Personal Finance Management
Applications to help people stay on top of their finances have become supercharged with Open Banking's advent. Now, they are no longer dependent on the users remembering to enter the relevant information. The apps can now track the user’s spending habits directly by connecting to the user's accounts to gain valuable insight into cash flows and make the appropriate recommendations to help them reach their financial goals.
Using the Open Banking framework, there are software solutions that can file taxes directly for you with the appropriate tax collection agency based on your account information and taxes owing, skipping out on the process of manually having to file taxes and reducing the likelihood of mistakes and omissions.
Robo advisors and other wealth management platforms have seen a spike in popularity in recent years. These digital wealth managers benefit from the Open Banking environment to better understand the client before recommending the appropriate investment based on the client's ability and appetite to assume risks.
Please feel free to email us back with any coverage or data requests to implement or improve our current data set! We are a customer-centric provider and want to make sure our users are as satisfied as can be!
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Have a great week, and stay safe!
The Banq team