Open banking has phenomenally impacted the financial industry by sharing its data through secured API with authentic third-party service providers. This has delivered many benefits to banks and financial organizations. Here are a few:
For businesses
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Low transactional fees
Open banking has helped banks to pay less for transactions through verified third-party service providers. Due to open banking, more payment service providers have associated with banks, thus expanding the convenience of transactions.
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Higher conversion rates
Due to multiple choices in the payment landscape, banks now see higher conversion rates with improved customer experience. Open banking brings multiple payment methods for businesses, which has increased conversions.
For customers
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Security
Security with open banking is a boon for customers. Verified third-party service providers now provide higher security standards to customers for all online payments and methods. Transparency, identity authentication, passwords, and more add extra security layers with open banking.
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Reduced service costs
With open banking, banks have reduced their services costs, which has benefitted customers a lot.
For banks and financial organizations
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Exposure to Financial Technologies
With open banking, banks bring new business ideas and create innovative products and services. FinTech companies also introduce new techs and collaborate with banks on innovation grounds.
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Increased collaborations
Banks today are speedily collaborating with FinTech companies to innovate their infrastructure in the increasingly digital era. With Open banking’s APIs, banks are also able to expand their tech investment and stay updated with innovative solutions for their customers.
These benefits are helping the overall industry to gain customers through higher customer engagement and business expansion. As digital banking and financing rise, institutions are forced to bring innovations rapidly to stay competitive in the emerging market. Open banking has been an added advantage in building digital finance and banking systems.
Read More: What are the benefits of open banking?
