Unlock Opportunities and Possibilities in Financial Sector with Rising Open Finance

Due to the impact of the Covid-19 pandemic, SMEs have had to change their approach to operate their business and finances. Over the past year, around a 20% increase has been noticed in the utilization of API technology and digital services by financial institutions across the European Continent.

Last year September 2020, OBIEE reported that more than 2 million individuals were getting leveraged from available bank products and solutions, there was an incredible 100% upswing in the number of customers in just 6 months (approx.) since the epidemic of Covid-19.

It is expected that 71% of small businesses of the UK would be using numerous benefits of the open banking system by 2022 as it is becoming so popular and prevalent in today's financial scenario.

Small and Medium businesses need the integration with the faster and tailored support technologies to fully embrace the digital-focused world. Meaning, the financial institution will need to have a deep understanding of the borrower’s financial health for better credit decisions, and open financial and accounting data API is the solution to do that by various methods.

Leverage Open Banking by Financial Institutions

In beginning, open financing initiatives may have been started with limitations from financial institutions who believed they had no choice except to give third parties access to their consumer's financial data in return.

Soon, various benefits came in light of using open financing technology, making the probability of extending data serving to include other domains and sectors in the future a very tangible possibility. Like, an advanced digital infrastructure enables data to be utilized smartly to amplify the customer experience and hence the lifetime value of the customer.

There is also the potential for increasing collaboration. When financial institutions build collaborative interrelations with financial third parties, they are able to create unique offers to attract new business and retain ongoing customers. By developing and selling access to customers, financial service providers are able to create extra revenue scope that is compatible with other financial applications.

The Advantage for Small Businesses

Extending the world of financial systems for borrowers can only allow greater possibility and flexibility. There have been sophisticated requirements of lending to financial institutions than ever before – the need of evaluating and predicting cash flow, making a faster and effortless

borrower journey, integrating many financial applications. Also, the enhancing the potentials to benefit from more informed lending and credit decisions. In any case, there is no request that doesn't halt in demand. Small Business Owners presently have tremendous data footprints which they use to operate their business - accounting system integration, financial frameworks, stock management applications, etc.

Bottom Line

There is a rise in demand for Open financing due to the need for new digital technologies born out of the covid-19, and there's surely no stopping it now. Evidently, it is in huge demand, even there has been a tremendous acceptance of it from the financial & banking sector. Hopefully, not just open lending or open banking - digital data APIs will be embraced by the world over the coming few years, and hence, financial service suppliers are initial adopters of this initiative, in order to leverage as many benefits as they can.