Open finance is revolutionizing the financial services industry by giving consumers more control over their data and increased choice in the apps and services they can use.
As more financial institutions look to develop their open banking infrastructures, understanding the different paths available as well as the impact of those options is important for making informed decisions about integration, compliance, and competitive strategy.
Open finance drives innovation, security, and compliance
Open finance allows consumers and businesses to securely share financial data with third-party providers through APIs (application programming interfaces). This seamless method leads to improved customer experiences and increased innovation in financial products and services.
Implementing API-based connections as part of a financial institution's open banking strategy will allow it to limit the risky practice of screen scraping using user credentials. This empowers financial institutions to maintain higher security standards while still providing their customers with access to their financial information.
In addition, open finance strengthens security and regulatory compliance through secure, API-based data-sharing models that minimize fraud risks and unauthorized access.
Understanding Open Finance Platforms
Join industry experts Reuben Piryatinsky, CEO of Altitude Consulting and Ted Anastasi, Head of Growth at Akoya, as they explore the future of open finance.
Key open finance use cases
Open finance platforms create revenue opportunities for financial institutions by streamlining internal and external processes, increasing innovation, and enhancing customer experiences.
A key use case is simplified account onboarding and funding. By reducing friction during account opening, institutions can boost conversion rates while providing real-time account verification and funding, creating a seamless experience for new customers.
Improved financial insights and data aggregation provide another significant benefit. Open finance can provide customers with a comprehensive view of their finances across multiple institutions, enabling more informed decisions.
Open finance also allows for embedded finance and payments by enabling pay-by-bank solutions that reduce reliance on traditional card networks, offering cost-effective transaction alternatives.
Financial institutions should act now
Regulatory requirements like the CFPB’s Section 1033 Rule is adding to the urgency for financial institutions to consider open finance solutions.
Open finance adoption offers several strategic advantages:
- Enhanced customer trust: API-based data sharing replaces screen scraping, strengthening data security and privacy.
- Improved user experience: Customers expect seamless digital experiences.
- Competitive advantage: Provide value-added services such as personal finance management and real-time account verification.
- Revenue growth opportunities: Use transaction information and external data to offer personalized financial products and services.
The future of open finance
As open finance gains momentum in the U.S. due to consumer demand and regulatory compliance, financial institutions that prioritize adopting open finance platforms will be better positioned to offer innovative, secure, and customer-centric financial services
By making the right decisions now, banks and fintechs can not only satisfy compliance requirements but also use open finance as a competitive advantage in the rapidly evolving digital landscape. The time to act is now — open finance is here to stay.
Learn more about Akoya’s open banking compliance solution.
Read the webinar transcript.
