# Democratising Financial Data Through Open Banking Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2020-01-27 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: The Future of Banking: Embracing Open Banking Meta Description: Discover how Open Banking is revolutionising the financial industry, providing customers with seamless experiences and innovative solutions. URL: https://financedigest.com/democratising-financial-data-through-open-bankinghtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/finance-10-1736838949296-compressed.jpg) _By **Rahul Singh**, President of Financial Services,_ [_HCL Technologies_](https://www.hcltech.com/) While it’s difficult to overlook the importance of data in today’s financial services landscape, many banks are still grappling with the question of how to mine, evaluate and use it. Banks have historically struggled to get value from data, seeing themselves purely in the role of trustees of customer information, and never looking to put it to work. That picture is now starting to change though, with banks finally spurred into action by regulator changes, including Open Banking and PSD2. Making it possible to harness the power of data, Open Banking puts [intelligence](https://www.financedigest.com/artificial-intelligence-in-banking-magazine.html "Artificial Intelligence in Banking Magazine") into the hands of banks, and could bring about real change in the industry. **A new kind of bank?** In turn, banks will evolve in a number of different ways. Some are embracing PSD2 just to remain compliant; others are offering simple [services such as aggregating customer](https://www.financedigest.com/how-can-financial-firms-improve-customer-service-after-the-pandemic.html "How Can Financial Firms Improve Customer Service after the Pandemic?") accounts across multiple banks and offering them on a single dashboard. But the true power of Open Banking was laid bare in 2019 when Uber partnered with global bank BBVA in Mexico to place a banking product inside its app. Using the Uber application, Uber’s unbanked driver partner community and their families can now instantly [open a digital bank account](https://www.financedigest.com/how-accountants-can-improve-financial-planning-and-results-through-open-banking-to-help-smes.html "How accountants can improve financial planning and results through Open Banking to help SMEs"), get their earnings credit in seconds, apply for loans and access discounts and deals that Uber strikes for them. While the Uber-BBVA example shines a light on the innovative possibilities that [Open Banking](https://www.financedigest.com/why-open-banking-is-safe.html "WHY OPEN BANKING IS SAFE?") has unleashed, there are even more ambitious goals that other banks are reaching for, working with partners to own the entire customer journey. The signals are clear: Open [Banking is going to shake off inertia in the industry](https://www.financedigest.com/the-survival-of-the-banking-industry.html "THE SURVIVAL OF THE BANKING INDUSTRY"). And while Gartner says that we will see 80 per cent of today’s financial firms [go out of business or become irrelevant at the hands of new competition by 2030](https://www.gartner.com/en/newsroom/press-releases/2018-10-29-gartner-says-digitalization-will-make-most-heritage-financial-firms-irrelevant-by-2030), Open Banking is throwing them a lifeline. It will provide [banks the opportunity](https://www.financedigest.com/how-partnerships-between-fintech-start-ups-and-traditional-banks-herald-a-brave-new-world-of-opportunity.html "How partnerships between FinTech start-ups and traditional banks herald a brave new world of opportunity") to become agile while continuing with their branch networks to provide the familiar human touch. **Owning the** [customer journey](https://www.financedigest.com/how-to-navigate-a-seamless-journey-from-cio-to-chief-customer-officer.html "How to navigate a seamless journey from CIO to Chief Customer Officer") The real winners in the [coming years](https://www.financedigest.com/mena-infant-milk-formula-market-to-record-exponential-compound-annual-growth-rate-in-the-coming-years.html "Mena Infant Milk Formula Market to Record Exponential Compound Annual Growth Rate in the Coming Years") will emerge from the group of banks that are jockeying to own the entire customer journey. They will reap the rewards of time and effort [invested into creating partnerships that deliver much more than banking](https://www.financedigest.com/investment-banks-trading-revenue-likely-to-shrink-barclays-boss-says.html "Investment banks’ trading revenue likely to shrink, Barclays boss says"), catering to to all customer’s financial needs via a wider portal. As an example, think of a [customer who wants to buy a home: currently, the customer has to negotiate with a variety of providers](https://www.financedigest.com/verasity-joins-the-brightcove-marketplace-to-provide-customers-with-proprietary-ad-tech-technology.html "Verasity Joins the Brightcove Marketplace to Provide Customers With Proprietary Ad-Tech Technology"), each with a different service level and back-end system. Instead, a [bank could allow the customer to examine properties](https://www.financedigest.com/exclusive-china-regulator-launches-new-probe-into-banks-property-loan-exposure-sources.html "Exclusive-China regulator launches new probe into banks’ property loan exposure – sources") online, compare them, choose the property they want, complete the legal paperwork, pay for the property, and even rent the furniture. This is the type of complete ecosystem [play that banks](https://www.financedigest.com/dont-play-second-fiddle-how-disruptor-banks-can-leverage-music-and-audio.html "Don’t Play Second Fiddle: How Disruptor Banks Can Leverage Music and Audio") will strive for. It will focus on creating [customer experience while making banking](https://www.financedigest.com/the-next-generation-of-customer-experience-in-banking.html "The next generation of customer experience in banking") invisible. This means intelligently and securely accessing customer data, allowing everyone, from end users and developers to the [traditional banks](https://www.financedigest.com/digital-banking-traditional-banks-vs-fintech-providers.html "Digital banking: Traditional banks vs. fintech providers") and financial institutions, to exploit it and harness its best possible use. The range of possibilities that this allows for is infinite and ultimately will help in putting [power back](https://www.financedigest.com/back-to-black-germanys-coal-power-plan-hits-hurdles.html "Back to black? Germany’s coal power plan hits hurdles") in the hands of the user. **Shaking up the** [global financial system](https://www.financedigest.com/global-automotive-brake-system-market-is-expected-to-witness-a-rise-of-3-cagr-between-the-forecast-years-of-2020-2030.html "Global Automotive Brake System Market is expected to witness a rise of 3% CAGR between the forecast years of 2020-2030") With such sweeping changes on the way, how will the new breed of [banks shape the future of the global financial ecosystem](https://www.financedigest.com/open-finance-and-smart-ecosystems-wont-wait-for-banks.html "Open Finance and Smart Ecosystems Won’t Wait for Banks")? To begin with, the volume of international bi-lateral and multi-lateral trade is growing. Also, with the demise of cash and cheque-based payments in favour of digital payments, we are seeing an explosion in [banking transaction volumes and data](https://www.financedigest.com/banks-struggle-to-harness-big-data.html "BANKS STRUGGLE TO HARNESS BIG DATA") availability. Furthermore, the rise of mobile devices has the [potential](https://www.financedigest.com/delivering-on-the-potential-of-open-finance.html "Delivering on the potential of open finance") to offer unprecedented outreach to the underbanked and thereby the democratisation of financial services. It is foolhardy to [predict which banks](https://www.financedigest.com/what-does-2022-hold-for-open-banking-some-predictions-from-the-ecosystem.html "What does 2022 hold for open banking? Some predictions from the ecosystem") will survive and which currency will take centre stage. Although of course countries and regulations will continue to exist, we cannot ignore the fact that the [current status quo is going to be challenged](https://www.financedigest.com/how-to-overcome-the-current-challenges-facing-your-fintech-business.html "How to overcome the current challenges facing your fintech business"). The [big battle that lies ahead for banks](https://www.financedigest.com/big-bank-ceos-to-sell-lawmakers-on-relief-diversity-efforts-amid-economic-regulatory-challenges.html "Big bank CEOs to sell lawmakers on relief, diversity efforts amid economic, regulatory challenges") is to own the customer, along with the complete customer journey. At the moment, that battle is being lost to aggregators like Amazon who are building customer [loyalty](https://www.financedigest.com/the-problem-with-measuring-customer-loyalty-and-how-to-overcome-it.html "The problem with measuring customer loyalty; and how to overcome it") and who own the customer more than a bank does. [Banks must](https://www.financedigest.com/lost-in-translation-why-banks-must-learn-the-language-of-their-customers.html "Lost in Translation: Why Banks Must Learn the Language of their Customers") place a firm focus on changing that equation, or their very existence could be under serious threat. It is [time to rethink and reinvent finance](https://www.financedigest.com/why-the-time-is-right-for-finance-to-embrace-digital-change.html "Why the time is right for finance to embrace digital change") for the mobile era. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---