NETInfo believes that open banking will transform the financial services landscape throughout the globe. Open Banking which is the rave of the Fintech at the moment is set to bring transformation by empowering banks to develop the skills and devices necessary for the creation of their own banking ecosystem via the open banking structure.
NETInfo believes that African banks are in the right position to take advantage of open banking opportunities through a revolutionary approach to service achieved through the application of innovative, agile, and efficient solutions which will, in turn, improve customer relations and lead to improved revenue for the banks.
Open Banking allows no limitation to customers’ financial data access. With the Open Banking system, customers retain ownership of their data and can grant their bank full access, allowing them to share the data with other third party entities at their discretion.
The innovative platform offers lots of benefits to banks and their customers. Through the use of the Open Application Program Interface (API), it eases business-to-business collaboration and aids the formation of new eco-systems and business models.
Some instances of new business models by NETInfo’sestimation include; provision of the end-to-end customer journey, offering a loan, selling insurance and so on. with open banking, customers now have another means of making payments which isn’t through hard currencies or by the use of cards, it also enables instant payment. Bank customers will now be able to pool their resources and manage their total monetary value from one application irrespective of where these accounts are held.
According to NETInfo, Africa with her large population of unbanked and under-banked people is best suited to receive the benefits of open baking which will facilitate financial inclusion for millions of people. With open banking, Africa’s economy is set to receive a boost as barriers to innovation will be rolled away and millions will have access to important financial products and services. If banks, FinTechs, Telcos, and other third party companies in Africa accept open banking, they will help to empower and widen the scope of African financial markets.
The African continent has shown its willingness to help her large population complete transactions quickly, securely and cost-effectively, a perfect example is M-PESA
NETInfo believes that Open Banking will help African banks improve customer experience and promote transparency in banking for the Africa region. A third of financial institutions will be pre-authorized to utilize customer data, obviating the need for the creation of a new and personalized data store, with the pre-authorization, banks can easily adapt to the changing landscape and offer personalized services to their customers.
NETInfo also opines that open banking has an important role to play in allowing a large number of the African population access to financial services for the first time in their lives. Open banking will lead the revolution of digital financial services by allowing customers to own and share their data with a financial institution so that they can utilize the data in the creation of improved products and services.
Africa can examine the experiences of other regions that have embraced open banking as a model to create a system that will work specifically for Africa.
NETInfo states that the open banking system will help Africa’s financial institutions reduce the cost of transactions by enabling payment directly between bank accounts. By allowing payment between bank accounts, payments and transfers can now be made instantaneously. Banks will be able to cut costs with the Open Banking system as they will no longer be dependent on 3rdparties like credit card companies and mobile money service providers.