The financial technology space is booming like never before, as open technologies like blockchain and open banking are already into place. As we move deeper into digital technologies, we find our data to be more open and easily accessible across various medium.
Open Banking is a new secured and standard way for consumers to share their banking information, for use by third party developers to build applications on top of it. It is based on open api specification of the core banking functionalities, which exposes banking system data to the world. It will be just like giving access to your social data(facebook, twitter) to other apps.
After all, Bank for next generation is just another app.
UK launching open banking specification, comprising of 9 major banks on 13th January 2018, being the first in this space to implement open banking. Where only service providers which are regulated by FCA(Financial Conduct Authority) will be granted access to the system.
It has the power to revolutionise the way we move, manage and make more of our money.
Applications:
- Better financial advisory apps for next generation consumers.
- Removal of payment payment services for merchants like Paypal to receive funds.
- Faster and better loan/lending ecosystem, as services will have access to entire banking transaction history rather than only 3months bank statement.
- Building competitive marketplace for banking services.
- Plus, many more amazing cool apps which will literally flood banking ecosystem.
Blockchain, do i really have to explain about this one? It has already been covered so much by so many people. It's a new technology which could disrupt current financial ecosystem in its own way. From financial perspective it's a decentralise ledger which is shared across multiple bodies and where once a data is written can not be changed or deleted. Making it a single source of truth.
There is so much to blockchain than just a decentralised ledger but that would go beyond this post, like smart contracts, etc.
Endless possibilities:
Integrating open banking specifications with blockchain protocol, will result in blockchain gaining access to a users bank information and operations. One of the use is instant cross-border interbank settlement system, without having banks to change the their legacy systems to blockchain.
All I can say is the financial ecosystem is gonna be more transparent and much filled with cooler apps in the days to come.
Thanks for reading the post. Hope you like it! :)