One of the most profound advances in fintech revolves around open banking and open finance. This movement, which uses technological capabilities to connect a variety of financial platforms, collate financial data, and glean detailed insights from the data, is changing how personal finance operates and how companies do business.
It started with mobile banking options offered directly by banks, but now, open finance has advanced much further. Third-party financial service providers can use open finance technology to assist their clients at a more granular level and make more informed investment decisions.
Open Banking, a leading organization in the space in the UK, publishes a yearly impact report to understand how quickly consumers are adopting this technology. In a six-month period in 2021, there were 6.1 million open banking payments made in the UK, but in the same period the next year, that number went up to 21.1 million.
Right now, the open finance market offers value through improved financial decision-making capabilities, an increasing number of payment options, and better borrowing opportunities, but these are just the beginning.
Open finance is expected to balloon over the next five years, changing individual and institutional finance practices all over the world and making benchmarks for service higher. It’s one of the most transformative applications of technology in finance to date.
With it, account balances from investment accounts, retirement accounts, savings accounts, and more can be brought together to paint a full financial picture. The easy combination of critical data points will lead to customers getting real-time analytical insights at any minute of the day, equipping them to make the best financial decisions possible.
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