Open Banking and talk of embracing Open Banking is
nothing new. It’s been the subject of many forums and conferences for bankers
for quite some time. It was also the subject of conversation at a recent meeting with OmniPayments CEO Yash Kapadia while he was travelling through Australia where even the biggest of Australian banks talked about their desire to move in that direction. So, what does banking management mean by Open Banking?
It’s all been about providing APIs into banking applications that are open and as such, accessible by any company that, as part of their own application or app, needs to tap the resources of one or more banks in order to complete a process. Think of all the new FinTech companies that eventually need to get back to information only saved at a bank – again, think about getting a loan from a bank and wanting to know the loan opportunities from multiple banks. Why would you want to visit each and every bank if there is an app that taps into them all?
Yes, it’s about transparency, after a fashion. By this we mean that the really tech-savvy companies will know how to use these APIs – it’s not so much a case that with open banking we will all be able to use the APIs as oftentimes there will be restrictions to ensure that it’s not a free-for-all for just about anyone to get hold of account information. In some circles the whole idea of the open banking initiative, taken to its ultimate conclusion, is all rather silly – a daft idea as some analysts have called it! However, there is some merit to the goals of the open banking initiative as many individuals today have multiple bank accounts with different lenders for homes and autos not to mention overdraft and other credit instruments together with a number of credit and debit cards all sourced from different financial institutions. Online banking began a process where it only made sense for individuals to have the ability to move funds between FIs at will and at any time.
And yet, the number of times that open banking comes up when even the biggest banks talk about their strategic direction are too many to ignore. It is about open APIs and it is also about the use of the open source to access them. In part it’s a measure of the frustration that big banks have with their existing technology, architecture and choice of systems as much as it is being viewed as an opportunity to grow their business. It’s hard for any of these big banks to ignore the flexibility and indeed speed of deployment that advocates of use of open source promote – in a world dominated by Linux, Android, GIS, Firefox, PostgreSQL, Python, etc. etc. it’s enough to get their heads spinning. While there is much to be said that’s positive about the open source movement, it’s not without its issues, the biggest being the mechanics behind release control. I can’t keep updating the software in a production environment every day – there are windows governed by other parties that only allow me to make changes just a few weeks of the year!
None of this is lost on OmniPayments. In an article just published in the January, 2019, issue of NonStop Insider, OmniPayments celebrates globally – it’s been a very good year! the topic of open banking is addressed:
It’s all been about providing APIs into banking applications that are open and as such, accessible by any company that, as part of their own application or app, needs to tap the resources of one or more banks in order to complete a process. Think of all the new FinTech companies that eventually need to get back to information only saved at a bank – again, think about getting a loan from a bank and wanting to know the loan opportunities from multiple banks. Why would you want to visit each and every bank if there is an app that taps into them all?
Yes, it’s about transparency, after a fashion. By this we mean that the really tech-savvy companies will know how to use these APIs – it’s not so much a case that with open banking we will all be able to use the APIs as oftentimes there will be restrictions to ensure that it’s not a free-for-all for just about anyone to get hold of account information. In some circles the whole idea of the open banking initiative, taken to its ultimate conclusion, is all rather silly – a daft idea as some analysts have called it! However, there is some merit to the goals of the open banking initiative as many individuals today have multiple bank accounts with different lenders for homes and autos not to mention overdraft and other credit instruments together with a number of credit and debit cards all sourced from different financial institutions. Online banking began a process where it only made sense for individuals to have the ability to move funds between FIs at will and at any time.
And yet, the number of times that open banking comes up when even the biggest banks talk about their strategic direction are too many to ignore. It is about open APIs and it is also about the use of the open source to access them. In part it’s a measure of the frustration that big banks have with their existing technology, architecture and choice of systems as much as it is being viewed as an opportunity to grow their business. It’s hard for any of these big banks to ignore the flexibility and indeed speed of deployment that advocates of use of open source promote – in a world dominated by Linux, Android, GIS, Firefox, PostgreSQL, Python, etc. etc. it’s enough to get their heads spinning. While there is much to be said that’s positive about the open source movement, it’s not without its issues, the biggest being the mechanics behind release control. I can’t keep updating the software in a production environment every day – there are windows governed by other parties that only allow me to make changes just a few weeks of the year!
None of this is lost on OmniPayments. In an article just published in the January, 2019, issue of NonStop Insider, OmniPayments celebrates globally – it’s been a very good year! the topic of open banking is addressed:
Like many of our OmniPayments customers we were bombarded
almost daily with updates on Open Banking. And like many of you, we are
oftentimes left scratching our heads – Open Banking has been around for a good
while now but it seems as though the CEOs at the helm of many financial
institutions are only just becoming aware of this initiative. Expressed simply,
Open Banking is all about externalizing traditional banking services, including
applications, the database and in some ways even the metadata via APIs that give
the customers of all FIs the ability to create, publish and manage the
information not only for one account but for many accounts. Traditionally, we
have anchored our interaction on a single check account into which our salary
was deposited and out of which we paid our bills, giving us a small amount of
cash left over to live a little. But today, the FI users have multiple accounts
across multiple FIs and they just love to shop for deals, be it an overdraft, a
credit card finance rate or even a mortgage. It’s all about the customer
experience and meeting the needs of every FI customer.
It is indeed this desire of banks today to better
address the customers’ experience and to accommodate their needs to do most of
their banking from the smartphone that is overtaking any early directives
associated with open banking. Every FI has to understand that their customers
can quickly change banks as easily as they can change their mobile phone
operator – it’s all just a few clicks away. And to read more of how
OmniPayments is working with its clients to bring meaningful access to the
types of services and data to be found at an FI take a look at this latest post
to NonStop Insider:
https://www.nonstopinsider.com/uncategorised/omnipayments-celebrates-globally-its-been-a-very-good-year/
https://www.nonstopinsider.com/uncategorised/omnipayments-celebrates-globally-its-been-a-very-good-year/
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