In simple words, open banking is the process to enable any third-party payment service and financial service provider to access consumer banking information like payment history and transactions. The practice is undertaken with the help of APIs (application programming interface).
Open banking payments are popularizing because they insist interoperability and better networking between service providers and banking information. You can get in touch with a reliable open banking payment service providers to get in detail about it.
Data shared while using open banking
Open banking is a process where banking data is shared with third parties. So, what is the kind of data we talk about? Here is the list of data that you will be sharing with your open banking service providers in UK.
Account Data
This includes account holder name, account types, currency, account open date, transaction details and so on.
Product and Services Data
When we are sharing things, it is a two-way exchange. By giving access to your bank account data we listed above, banks and third-party providers can in-turn share data and all the information regarding their products and services.
Look at this: Personal banking makes you meet a bank representative who gives you information about the banking services. When you open an account online, digital banking services directs you to the website to find out all the information. Open banking is a step ahead, it tailors the offering for your profile and make recommendations without even asking anything. Let us dig into a few more details here.
Open Banking explained in detail
You will find open banking services providers in UK and they are given access by the banks to deal with your data. Open banking is described how bank allows regulated financial providers to access, use and share your banking data. Nonetheless, this is never done without your consent. Whether it is just ticking a box on a terms and service check box or through an official email from the bank informing everything about it, it will always ask for your permission before taking any call.
Once you give your consent, these regulated service providers will aggregate the data they need, analyze it and start building an accurate consumer profile.
Let us help you understand this with the help of the following example:
In order to make this a little simpler, let us consider this. Personal finance is the lifecycle of financial management activities which a consumer performs to save, budget, spend, and invest their monetary resources. In the past, this was all done personally by visiting the bank.
Today, personal finance has become completely digitized and consumers can access their information right from their palm. This is the point where open banking comes to elevate the experience a little.
