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Open Banking is gaining more and more popularity each day. Before we learn about Open Banking in the UK, let's first talk about what open banking is? Open banking is a way of sharing each customer's financial data through different APIs with online third-party organizations.
This data is transmitted in a secure and standardized form between two or more organizations. Moreover, online banking makes it easier to make payments, shop online, and complete transactions through your smartphones and computers. It has also decreased the number of bank visits one use to make for even the simplest of task or query.
Open Banking Regulation in the UK:
Open Banking started in January 2018 in the UK, when PS2D came into effect. The emergence of open banking in the UK meant significant changes in how individuals use their money. Apart from that, how banks deal with all this money in their system.
When it comes to banking, no drastic changes have been made in the fundamental system; however, a few new ideas like apps, contactless payments, and ATMs are introduced, time after time. With open banking, the system went through an enormous change. It opened the banking data of individuals, which influenced how we use or move our money.
Open banking is a revolutionary step in the financial, retail banking system of the UK
Open Banking regulators are making every possible move to make data sharing of users available to third parties securely and soundly to increase competition and innovation. Apart from this, open banking is making significant advances in technology by using Application Programming Interface (APIs), allowing developers to include data from third parties into their system.
Moreover, with third-party apps, consumers are now open to sharing their data and accessing it via third-party services. They have started to trust mobile banking as it eases their life and keeps the information confidential. However, 43% of the population still relies on traditional retail methods.
The long-term open banking and changes made by it will lead to a better retail banking future in the UK. Furthermore, open banking is a way to approach new products and services, create new sources of revenue. These were previously impossible even to imagine. Apart from all this, we all revolve around technology today. That is one reason why open banking is the future of finances, as it is an easier way of controlling your finances.
Lastly, apart from making finances easier and online shopping accessible, open banking also allows users to take out loans conveniently. Moreover, it may be a source to creating an entirely different and better relationship between banks and consumers in the future