According to research by Financial Brand, banks and global credit unions are taking big steps to explore the possibilities offered by the digital tools and solutions that are already changing the world. They are using cloud technologies and advanced analytics to respond to changes in consumer expectations. The research findings were gathered through conversations with a range of financial services influencers, industry analysts and banking providers and highlighted three top trends and predictions for 2019. These include:
- Real-time intelligent data integration through the use of AI, advanced analytics and cognitive computing.
- A focus on customer-centricity and the elimination of friction from the customer journey.
- Use of APIs for the transformation to an open banking platform.
But what exactly is Open Banking?
The term is used to describe the common interfaces used by banks and other third parties to facilitate more competition and create new business opportunities. The Open Banking movement is part of the global banking industry’s efforts to become more “vertical” by offering services from the bottom all the way to the top. This gives customers greater control.
For example, using Artificial intelligence (AI) and big data, Open Banking makes it possible to bring together all of a banking customer’s financial information and give them the freedom to view and understand their finances when it suits them. And Open banking APIs speed up innovation, which means that banking ecosystems will be able to include more than just financial services, potentially making the consumer’s life a whole lot easier.
According to Matthew Barnard, an executive at software development company BBD, South Africa is already leading in the Open Banking space. South African banks are known for being innovative and aren’t waiting to be regulated before embracing the change, he explains. “One of the biggest opportunities is bringing the unbanked market into the financial system, which will require innovative approaches from many of the existing market participants. Open banking could play a role in meeting this by allowing lower cost niche solutions to easily interact with existing market infrastructures.”
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