What is Open Banking?

What is Open Banking?

Gilad Amir

20 years: Financial technology & banking

In this video, Gilad explains the meaning of open banking. He further explains its purpose and the initiatives that are likely to be seen in the future.

In this video, Gilad explains the meaning of open banking. He further explains its purpose and the initiatives that are likely to be seen in the future.

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What is Open Banking?

2 mins 21 secs

Key learning objectives:

  • Define Open Banking

  • Outline the purpose of Open Banking

  • Learn the evolution and future of Open Banking

Overview:

Open banking is an initiative aimed at increasing competition and consumer centricity in retail banking. Open banking has many safety and security safeguards that place customers at the centre of power.

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Summary
What is open banking?
Open banking is an initiative that has been led by the CMA, the UK Competition and Market Authority, to push the UK’s 9 biggest banks to comply with the UK implementation of PSD2, the European Payment Service Directive 2. Both PSD2 and open banking initiatives are aimed at increasing competition and customer centricity in retail banking, by requiring banks to provide authorised third parties, or TPPs, access to their customers data and initiate transactions on behalf of their customers, through a designated interface that is called  the Application Programing Interface (API).
What is the purpose of open banking?
Open Banking is part of a series of initiatives that should increase competition in retail and Small Business banking, by letting customers decide who can access their data and initiate payments on their behalf. As simple as it may sound, this new initiative fundamentally changes and shifts the balance of power between banks and customers.
Which additional initiatives can we expect to see in the future?
Open banking is an ongoing process and will continue to expand to other types of data, accounts and services including pensions and other investment accounts, loans, mortgages accounts switching. In addition, there are different assumptions about the coverage of Social Networks’ data as part of open banking.

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Gilad Amir

Gilad Amir

Entrepreneur and CEO with experience in business and consumer lending, banking and fintech.

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