The concept of Open Banking was born in the UK. This can only work of course, if everyone participates, meaning all the service providers, banks and Neo-banks. Services will be tailored to you and seeking for better deals will be easier than ever. The Open API model that underpins Open Banking can be applied in different sectors - mortgages, savings, energy, insurance, pensions you name it. We’re not done yet, there’s more to come. Open Banking-enabled credit scoring for SMBs could also help better assess the risk profiles of businesses and expand lenders’ loan portfolio again assuming that all lenders and bankers participate. The company has joined a PwC project to build a digital banking ecosystem sandbox along with a number of cloud-based platforms and API solution providers. UK-based Credit Kudos uses Open Banking rather than borrowing history to measure creditworthiness of individual borrowers. Analysing data from consumers’ bank accounts will allow better understanding of cash flow of loan applicants, reducing repayment defaults and personal debt. Nordic financial data provider Asiakastieto is building a credit-assessment solution using Red Hat’s OpenShift. This is of course dependent on universal adoption and homogenisation of the concept. Open data aims to provide comprehensive and complete data on an individual’s finances. It promises to open up a new era of lending and credit scores. What Open Banking unlocks does not stop at merely grading your spending habits (detrimental or healthy). Insights will reveal you have been Uber-ing, drinking espresso martinis too much, buying countless clothes you will ‘summer’ in on credit, how far you are from your savings target and many more. Technologies allow data retrieval even from receipts. Your scattered data is provided by different banks, cards and e-wallets you use and is put into one place. The APIs allow third parties such as personal finance management apps to access your data to give you a complete picture of your financial status. It aims to give consumers and businesses back the control and access over their data. Open Banking is a system which allows a secure and permitted access of individuals’ financial information by third parties using application programming interfaces (APIs).
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