The world of finance has changed. New players are challenging traditional banks. In addition, financial technology is developing rapidly and new financial services solutions are appearing on the market. A large part of these changes has been thanks to open banking.
Open banking is a term that refers to the development and use of technology that allows the creation of applications or platforms that offer financial services without the need to be a traditional bank.
Who benefits from open banking?
Thanks to open banking, innovations in financial services have come to market that focus on consumer needs and ensure maximum security while achieving those goals, but end users are not the only ones who benefit. Businesses, banks, financial institutions and consumers can also take advantage of Open Banking.
In a broad sense, open banking creates new opportunities. For example, the development of technology allows banks to adopt it and offer more personalized solutions, which benefits consumers. But it also helps banks learn more about their customers and expand their product offerings.
Benefits of open banking for consumers
These are the main benefits that open banking has brought:
- CUSTOMER EXPERIENCE
This is the result of two aspects that open banking has created: a competitive environment and digital services.
First, open banking challenges traditional ways and has opened the door for more players to enter the market. Creating a competitive environment benefits consumers because, in order to stand out, companies must ensure that their customer service meets the highest standards.
Second, open banking has simplified financial management. As a result, traditional banks have improved their online services, resulting in a better customer experience. Open banking is moving financial services from face-to-face to online, resulting in faster and simpler financial management for consumers.
- SECURITY
Security is at the heart of Open Banking. All third-party payment service providers must now meet the highest security standards to operate in the market. Open banking has also brought more transparency to the banking industry as more players share data and security features are more standardized.
- REDUCED SERVICE COSTS
With more competition, banks and other financial service providers are more likely to reduce the costs of their services to become more attractive to consumers. If consumers do not agree with the service provider’s price, they can easily switch to another and shop around for the best price.
- INNOVATIVE SOLUTIONS
Information sharing has encouraged companies to create more innovative solutions. Fintech companies are creating technology solutions that legacy banks have never offered before.
For example, kubofinanciero has democratized investing. Now, anyone can grow their money on a transparent, secure and easy-to-use platform. Not only that, it allows each saver to decide how much to invest, since its minimum amount is 50 pesos and for what term (from 3 to 5 years).
Among other innovations, kubofinanciero has also launched a debit card with contactless technology, which allows customers to conveniently pay for goods and services in physical stores by simply holding the plastic close to the POS.
Open banking offers consumers access to new competitive services, democratizes financial products and generates healthy competition in the sector.