Open banking is a new way of doing things where customers can share their financial data with authorised providers in a secure way. This allows for more competition and innovation in the banking and FinTech sector, as well as more personalised services for customers. Open Banking has been made possible by PSD2, a new European regulation that came into effect in January 2018.
There are several benefits for businesses when it comes to open banking. Firstly, open banking levels the playing field for small and medium sized businesses, which often have a harder time getting access to affordable banking services. It also provides the opportunity for banks and other service providers to offer more personalised services, such as recommendations for financial products based on your actual spending habits.
Secondly, Open Banking will also make it easier for businesses to get loans. Currently, banks and lenders use a lot of information about a business's financial history in order to decide whether or not to give out a loan. With open banking, businesses will be able to share their financial data with authorised providers in a secure and fast way. This will allow lenders to make quicker and more informed decisions about the size and terms of a loan.
Lastly, open banking allows you to aggregate all of your business accounts into one overview. This means that there is no longer a need to switch back and forward between bank portals and applications. Additionally, this also allows you to make real-time decisions as soon as you receive payments. Best of all, companies using open banking to aggregate their business accounts indicate they spend 50% less time managing their bank accounts than before open banking.
Open banking is a new way of sharing financial data with authorised providers in a secure way. It will create a more level playing field for small and medium sized businesses and allow them to get access to affordable banking services. Open Banking puts the power of real-time and instant financial events back into your hands. All you have to do is utilise it.
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