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The Lag in Open Banking

By CIOReview | Thursday, May 17, 2018

In the world of consumer banking, the Open Banking resolutions are indicators of a subtle shift. The marketplace that was long dominated by financial giants is today making way for newer agiler entities that are democratizing the industry. Open Banking being a path towards novel financial solutions, emphasizes more on those that are not really offered by conventional banking institutions. The Open Banking Initiative and PSD2 are opening up opportunities for several fintech firms and helping them fill the gaps that have been created by the bureaucracies of the traditional banking systems.

Gone are the times where customers use to stick to one bank throughout their lives. The Open Banking Movement has made customers own more than one bank account, across a number of providers. Challenger banks, with their more user-friendly approaches, are becoming favorites by diligently catering to customer problems. The time has come when bricks-and-mortar institutions need to buckle up and look back and reevaluate the products and services they offer.

Open Banking offers better money management tools and budgeting services. They give customers a better understanding of their finances. But the challenge lies in educating consumers about all the benefits.

A recent survey shows that a staggering 85 percent of customers are either unaware of the Open Banking System or don’t have a clear idea about it. For the system to flourish, it is imperative that customers be adequately educated about the offered services and their expected benefits.