For businesses, open banking allows a more efficient financial digital transformation. Why is it the Best Solution for Your Business?
For instance, with Nuapay you can securely biometrically verify account ownership and confirm payments in real time. Why is it the Best Solution for Your Business?
This helps reduce direct debit collection fraud, and it saves customers valuable time when paying for their orders. It also increases customer satisfaction and leads to more revenue opportunities. Why is it the Best Solution for Your Business?
Real-time payments
Today’s consumers are dealing with a multitude of financial accounts. They might have a mix of credit cards, savings and checking accounts with various banks and fintechs, as well as loyalty programs and insurance products from multiple providers.
This will help businesses reduce time spent on manual reconciliation and will enable them to make better decisions with data that’s clearer and more accurate.
This improves the customer experience by eliminating complications that often lead to abandoned carts, and also helps reduce the cost of payments by cutting out card-processing fees.
Personalized products
Open Banking payments enable businesses to offer customers more personalised products. For example, they can use customer data to provide them with better ways of managing their spending, applying for credit or selecting payment terms like buy now pay later.
This allows banks to focus on core services while allowing fintechs, software developers and others to build innovative solutions for their customers.
Customers benefit from a simple, secure and cost-effective system which eliminates the need to download an app or remember their card details or passwords. It also offers the highest level of security by using face or fingerprint recognition rather than sharing credentials with the merchant (who doesn’t store them).
Better customer experience
Open Banking regulations allow customers to give access to their account data to third-party service providers (like fintechs) without sharing their username and password. With credential-free, tokenized APIs, both consumers and financial providers get better protection against fraud and security breaches.
Two models enable access to customer data – an account information services API that allows authorised third parties to display and consolidate balance and transactional data from a bank account and key account features (also known as AIS), and a payments API that enables an authorised third party to initiate online payments on a customer’s behalf with their consent (also called PIS).
Consumer research indicates a strong demand for new and improved banking services among a savvy and connected generation of consumers. However, regular headlines of data breaches and scams can raise concerns about the security of third-party access to their bank accounts – making it essential that any business offering these services takes steps to educate customers about the benefits and ensure the highest standards of technical security.
New revenue streams
One of the most exciting aspects of Open Banking payments is that they allow for new and innovative financial services. In Europe, account aggregation apps like ING-backed Yolt have sprung up to let consumers see all their accounts from different institutions in a single app. In other markets, regulators have pushed for standards and regulations to enable third-party providers to access bank customers’ accounts, enabling them to offer a variety of customer propositions.
For instance, a third-party financial planner could use secure access to a customer’s bank accounts and payment information to help them make better investment decisions. This is something that would be impossible under a closed system.
For banks, the opportunity for new revenue streams is tremendous. But, to take advantage of the potential, they must master several digital technologies, including APIs. By securing and implementing APIs correctly and creating a smooth onboarding experience, banks can establish themselves as trusted ecosystem participants that will generate revenue on both the supply and demand sides of the market needs read more hear.
