Guest Commentary By Shanda Purcell, CSI
Discover How Open Banking is Driving the Future of Financial Services
expectations, open banking can position institutions for the future and allow them to respond to those changes, with technology partners assisting them along the way.
Open banking allows third-party technology developers, like a core technology vendor or specialized fintech, to access a bank’s data and provide it with specialized products. Banking data is no longer confined within an institution’s walls. With open banking, financial data and capabilities are everywhere.
EXPLORING OPEN BANKING Although confusion may exist over the terminology, open banking is an umbrella term that encompasses every banking use of application programming interfaces (API) to share data. Tis soſtware is familiar, and some banks may be surprised to know that although they haven’t referred to their practices as open banking, they’ve embraced the model for years.
Open banking APIs enable many different services through bank data exchange, including financial services like payments and account management, embedded credit score ratings,
onboarding identity verification and many more. In short, they enable the digital banking services that today’s customers expect while simultaneously adding technology to aid employees with backend processes.
Te most common open banking strategy is banking as a platform, also known as platform banking. Tis model involves a financial institution connecting new technologies (typically from its core technology provider) to its central enterprise core technology.
Banking as a Service (BaaS) is another open banking application that has recently gained steam. BaaS uses the foundation of open banking to enable banks, their core vendors and a nonbank organization (oſten a fintech) to create new financial products or provide financial products in new environments. Neither platform banking nor BaaS are synonymous with open banking. Instead, consider each of these models as an example of what open banking can do.
22
mobankers.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32
