What is open banking and what is its main objective?

Open Banking and its objective?

n Banking is to reduce barriers, making loans more democratic. Facilitating the sharing of information between institutions, giving the client total control and choosing the institution that offers the best conditions.

Advantages of Open Banking

The modality provides better experiences in the use of financial products and services. Thus, it makes it possible for institutions to present easy solutions, which helps customers when it comes to controlling finances, especially in times of crisis. In addition, other advantages can be highlighted.

1. More freedom and autonomy for customers

Customers now have more freedom when changing institutions, without being trapped in costs or shortages. In addition, the longer the relationship with the institution, the more detailed the information will be.

The portability that is so well known today in the world of telephone operators will also be possible in the banking ecosystem. In this way, it greatly facilitates the process of changing institutions.

2. Cost reduction

As there is no possibility of being tied to a single institution, the tendency is for costs to begin to reduce and to attract more clients. One example is digital accounts. Opened with a few clicks, they do not charge maintenance fees.

This is also because institutions will have lower costs. After all, with the integration of the new system, some intermediate processes will be eliminated.

3. Increased competition between banking institutions

With Open Banking, the barriers to finding new services will be reduced. With this, banks will promote greater options and benefits for the consumer, which will consequently affect the environment to become more competitive.

Precautions when adopting Open Banking

A new phase of Open Banking began on August 13, starting to share personal data between the banks that joined the modality. This sharing was only done with the customer’s authorization.

Even with so many advantages, you have to be careful. The biggest villain is due to cyber crimes. Some systems use personal data such as credit card number and information about insurance and consortia.

Therefore:

  • Choose your financial institution well;
  • Search for certifications and authorizations from the Central Bank;
  • Doubt proposals that are far from reality, with exorbitant values ​​or discounts;
  • Do not reply to messages or click on links;
  • Always seek personal contact with your manager.

And remember, there’s little care!

Why adopt Open Banking?

Customers who intend to join Open Banking need to authorize, through the digital channels of financial institutions, the information they want to share and the deadline for this to happen.

A more transparent flow between institutions is expected, favoring the best offers and services, offering customers an easy and safe experience.

Some of these accredited institutions are distributing gifts to customers who are joining the open bank.

Customers will be favored with credit rates and lower investments, also providing the creation of new products. This will only be possible, as the banking institutions will be aligned and aware of the real needs of their account holders.

In this case, the customer who has an account at bank A and wants to take out a loan at another bank, he authorizes the sharing of his information so that the banks talk to each other and the customer knows which one offers the best proposal.

Is Open Banking safe?

Beforehand, Open Banking is secure.

According to the Central Bank, participating institutions must comply with requirements that guarantee the security and secrecy of all shared information. Above all, it doesn’t mean that the data will be public, but that people will be able to take it where they want through APIs. And they are nothing more than a technology that allows this exchange of information.

The creation of the Open Banking system is precisely to ensure a safe environment for everyone involved.

Finally, each financial institution will continue to have the autonomy to develop products that make sense, adopting their own security methods. It is important to know that no one will have access to customer data without authorization to share the information.

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