The paradigm of open banking has led to more choices and better services for customers and enabled technology such as artificial intelligence to build a robust and transparent economy. Across several industries, open banking is bringing the focus on better customer experience, digitalization, collaboration and data strategy.
Top Industries Open Banking Is Disrupting
While it continues to revolutionize banking, open banking is beginning to impact other industries beyond financial services.
Travel: Opening a bank account requires the same type of documentation as travel. Digital identity providers can leverage open APIs to quickly and securely access customer identities via their banking platform. Traveling with a passport may soon become a thing of the past.
Smart city: Open data will grant authorized access to consumer data, revealing preferences like their favorite method of transportation or which stores they frequent.
Real estate: Open banking can help landlords and real estate agents make better tenant selections by giving them access to a prospective renter’s credit assessment and historical financial data.
Insurance: Open banking is making way for personalized advice and optimized claims management to improve reconciliation and reimbursement in the insurance sector. Leveraging open banking and AI algorithms, insurance companies can even underwrite without a medical examination and lower premiums.
Transparency: Open banking is making different industries more transparent. In Denmark, for instance, open data helped close the gender pay gap by 7%, thus supporting fairer wages.
Use Cases of Open Banking Beyond Financial Services
Fintech innovators are creating new applications in tax accounting, loans, travel credit cards and even healthcare, blurring the lines between services as we know them.
Take Kalgera, for example, created by a physician who saw how financial worries take a toll on his patients’ mental and physical wellbeing. The app was specially designed for the elderly and the vulnerable and uses deep learning to detect financial vulnerability and prevent frauds and scams.
Or Cleo, a budget app geared towards Millennials and Gen Z. Yes, the app uses their AI platform to offer personalized budgeting, spending breakdowns, tips for budgeting and savings. But what makes Cleo different is its “personality modes” that encourage and even “roasts” the user. Using memes and sarcasm, Cleo helps individuals truly get comfortable with their finances.
And Currensea, a multi-currency debit card that’s tied to the user’s bank account and can be used anywhere in the world with none of the messy inter-bank exchanges or exorbitant fees. It uses open banking principles, bank-grade encryption technology and FCA guidelines to make spending money abroad easy and secure.
The opportunities with open banking are endless. Thiago Alvarez, founder and CEO of Brazilian fintech Guiabolso puts it best, “Open banking is a technology infrastructure. It is neither the interface nor the product. What will define the success of open banking will be the services and products that financial institutions and fintechs create.”
How do you create these groundbreaking products and services? Explore how the financial sector intersects with other industries in novel ways and build on your fundamental knowledge of fintech in the Oxford AI in Fintech and Open Banking Programme. Download the free prospectus today.