Open banking

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Open Banking is a financial services term as part of financial technology that refers to:

1. The use of Open APIs that enable third party developers to build applications and services around the financial institution.
2. Greater financial transparency options for account holders ranging from Open Data to private data.
3. The use of open source technology to achieve the above.

Open Banking, as a concept could be considered as a subspecies to the Open Innovation concept, a term promoted by Henry Chesbrough. It is linked to shifts in attitudes towards the issue of data ownership illustrated by regulations such as GDPR and concepts such as the Open Data movement.

Video Open banking

History

On October 2015, the European Parliament adopted a revised Payment Services Directive, known as (PSD2). The new rules included aims to promote the development and use of innovative online and mobile payments through open banking.

In August 2016, the United Kingdom Competition and Markets Authority (CMA) issued a ruling that required the nine biggest UK banks to allow licensed startups direct access to their data down to the level of transaction account transactions.

Support for the concept is not unanimous. Mick McAteer, of the UK Financial Inclusion Centre, thinks that only the tech-savvy will benefit. He says that Open Banking is "a daft idea", which will lead to more financial exclusion for those on low incomes. He says it is naïve of regulators to expect consumers to own their data and be able to get better deals from banks, and points out the danger of consumers being exploited, either by businesses offering new types of expensive payday loan, or misuse of data and personal information that people have revealed in places such as social media.

The Second Payment Services Directive (PSD2) came into force in the UK on 13th Jan 2018 though by this time, five of the nine regulated banks had applied for and been granted extensions in implementing the mandated changes.

Maps Open banking

See also

• Account aggregation
• Open Banking Nigeria

src: www.internationalfinance.com

References

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External links

• Open Bank Project
• Open Banking Nigeria Project
• Directory of Open Banking Sites

Source of article : Wikipedia