Open bankinghas beengaininggreatimportance and is beingembraced across the globe.Within the past couple of years, it has also been gaining great momentuminour region,withBahrain being the first to introduceOpen Bankingregulations and other jurisdictionsin the wider areaare following suit.

But before getting into how Open Banking can improve financial services, let’s start with understanding the basics and what Open Bankingreallymeans.Usinga universal Application Programming Interface (API),Open Banking enables the sharing of financialdata betweenfinancial institutions and approved third-party providers (TPPs) in a secure regulated mannerto provide personalized products and services that are seamless and beneficial for theconsumer.

Ultimately, Open Banking is about improving customer experiences within thefinancialservices. While other sectors have evolved, financial services have yet to address that customer experience gap.The financial sector todayis still a‘one size fits all’and offers all customers the same set of products and services.

To draw some comparisons, let’s take Netflix as an example and how the platform shows its users recommendations based on what type of shows they like watching and what could potentially interest them. With Open Banking, the same can be possible with financial services. Users can gain greater access to their financials, make secure and swift payments,manage multiple accounts such as deposit accounts, credit cards, and loans, andbe able todo all that on one preferred platform of their choice.

Thekeyasset that enables thisisfinancial data, it isthe ‘how’ behind the improvementoffinancial services.Financial data is one of the most,if not the most,underutilizedkindof data.Financial data such as income levels, spending behavior and saving habits can be utilized totailorpropositionstomeetthe need of the customer.

From an industry viewpoint, Open Bankingsupports innovation through drivingcollaboration between banks andFinTechs.It empowers both incumbents and smaller tech companies towork together to build innovative solutions with faster to market delivery.Hence driving bank and fintech partnerships in the sector.

And while this is all exciting, as data’s importance and value is significantly rising,so isconcernsabout data privacy and security.So,how safe is Open Bankingreally?Contraryto existing misconceptions, Open Bankingoffersa more secure way forcustomers to access their all their financial data.With customer’s consenting first,Open Bankingputs the power back in the hands of the user as theyare the true owners of their dataand are the ones who decide on who to give or revoke access totheir data.

All in all,Open bankingoffers great opportunitiesforboth financial institutionsandfintechsthat are looking to increase customer engagement on their platformsand end-usersthat are lookingfor better customer experiences.