The Economy Digest | 5 Reasons Why Businesses Should Use Open Banking in 2024
Banking and Financial

5 Reasons Why Businesses Should Use Open Banking in 2024

5 Reasons Why Businesses Should Use Open Banking in 2024
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Why is the entire fintech industry shifting towards open banking? This type of banking is simply where your clients can access their own financial data and control it. In the UK, the conversion of this technology is already up by 10% month to month. These businesses are not the only ones receiving open banking incentives that cater to them efficiently, but also leave space for your business to settle in. Scroll below to find out 5 of those incentives to switch to open banking in 2024.

Privacy Compliance

Financial data is obviously extremely important to everyone within this industry. It is imperative that most of these financial intricacies and details are controlled and protected at the best possible level. Here, open banking might sound very liberal with its data, but it offers three diverse levels of protection for your business and your client’s data. These are:

Bank Level Security: only your business can ask the client for their log in credentials

Client Control: the client ultimately has full control over their data

Extra Protection: your business is protected by data protection laws of your country

Clean Transactional Climate

The more we advance with technology, sustainability concerns also get activated. Here, your client’s financial transaction data can be used to calculate the carbon footprint emitted by your business. This will also be an indicator of where your business stands on the sustainability scale, along with providing exciting cash back offers for your clients which will make them buy back from you.

Digital Identity Determination

Consider the following case: you have to identify your customer’s creditworthiness. Instead of manually calculating all the factors, open banking just readily allocates that data to you by collecting this information from your clients. Hence, while this data is protected, you can also draw conclusions from it tailored to your business. Here, open banking can also provide your clients with access to use their bank accounts whenever and wherever they are located, because their data is always on the go.

Faster, more Inexpensive Payments

It is a fact that open banking payments are 80% cheaper for businesses to process than the payments that are done traditionally. Moreover, it also provides access to better and wider financial services that your clients could opt for, resulting in faster payments. Wider choices in payment services means that if one method fails, you can always ask your client to choose another way to pay.

Enhanced Customization

Open banking can access data more than just the customer basics. It can collect data from a wider pool of customers through their associated financial institutions. This can benefit your business in terms of how personalized you can make your services. For example, through open banking data, you can prescribe your customers a credit card offers or several types of funding available to them and more.

The bottom line is that every time your customer uses open banking, it should provide them with a better service than their existing financial service provider. Hence, your business within the field of fintech can most definitely benefit from inculcating open banking facilities in 2024.

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