Open banking is a relatively new instrument for the software development of applications for banking services, which is based on programming interfaces. The bank can exchange data with partners and third-party suppliers of goods and services.
Let's take a look at seven open banking examples that demonstrate the the concept's effectiveness in practice.
Open banking example № 1 - Chatbots integration
The widespread use of natural language has not been neglected in Open Banking. Recently, some banks have launched chatbots that can advise clients using artificial intelligence. These software programs have access to bank databases and information about user accounts, so they can help clients independently resolve many issues that arise:
- View balances across their accounts
- Get a weekly snapshot of their month-to-date spending
- Receive bill reminders
- Examples of chatbots include financial digital consultant Erica for Bank of America and Mastercard KAI bot.
Open banking example № 2 - Facebook Messenger payments
- Via Facebook Messenger people conveniently and securely can send or receive money between friends. Such a transaction is free and is possible without leaving the app.
- Facebook cooperates with such technology companies that provide services for accepting and processing electronic payments, like PayPal, Stripe, Braintree, Visa, American Express, MasterCard.
Open banking example № 3 - BBVA Open Platform
BBVA is an open-source platform created by fintech entrepreneurs for software developers. It offers many possibilities:
- Support for various types of payments
- Improving banking services
- Customer Identification Program (CIP)
- Access to easily integrated and easy to use APIs (Move Money, Core Banking and Identity Verification)
- Thanks to BBVA, many fintech companies, including Digit, Xero, and Wise, already deliver incredible finance innovations. Thus, BBVA is a competitive player in open banking development.
Open banking example № 4 - Paypal and Siri
- PayPal is one of the first global payment providers to integrate with iPhone Siri voice support. This feature is made possible by a dedicated SiriKit API. Thus, Siri can work inside third-party applications, and not just in Apple's applications.
- Payments are just one of of the features currently supported by SiriKit. It also includes Event Suggestions, Maps display, Vocabulary, and more.
Open banking example № 5 - Robinhood Investment & Trading app
By linking your bank accounts in the app, with Robinhood you can:
- Invest in stocks, options and funds
- Buy and sell cryptocurrencies
- Manage cash
- Robinhood uses an API from fintech company Plaid, which allows developers to access banking information.
Open banking example № 6 - Venmo payments app
- Venmo app also uses Plaid’s. It is a free digital wallet and payments system that helps you make any purchase quickly and effortlessly.
- The Venmo Android app lets you send or receive money via messages or QR codes.
- It has many similarities with PayPal, except PayPal is widely used by small and large scale businesses, whereas Venmo is mostly used for transactions between friends.
Open banking example № 7 - LetyShops Cashback
- LetyShops is an online service that returns part of the funds for purchases in over 2400 online stores around the world. Thanks to the API integration, the LetyShops Cashback service was able to build a closed ecosystem with completely transparent cash flow processes.
- Thus, all settlements between LetyShops, buyers, sellers, and banks are as synchronized and transparent as possible.
- LetyShops partners with such companies as Booking.com, iHerb, AliExpress, Joom, ASOS, MOYO.
As you can see, thanks to the concept of Open Banking, in which banks open their APIs and allowing third parties to access their users' financial information revealing new software development opportunitieis, many new applications and services are emerging.
Open Banking is a beneficial ideology that allows banks to improve their work and compete confidently with various fintech and IT companies that plan to work in the financial sector, as well as offer a more efficient customer experience.
If you want to leverage your niche business with open banking, then now is the right time to start. It will allow you to practically stand at the origins of the large-scale further development of the financial industry.