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In the rapidly evolving landscape of digital solutions, Open Banking is imperative for maintaining customer engagement and securing a competitive edge. Here are four transformative benefits this technology offers to your solutions.
Benefit 1: Streamlined Onboarding Process for Your Customers
Traditionally, customers have perceived the onboarding process as a tedious journey, marked by lengthy forms, delayed verifications, missing information, and frequent back-and-forth emails or chats.
Banks conduct meticulous Know Your Customer (KYC) processes due to their role in holding funds. These procedures include verifying the origin of funds and ensuring accurate information on the Ultimate Beneficial Owners (UBOs), among other crucial checks.
With the customer’s consent, Open Banking leverages the bank data from the account holder to automate user onboarding. Once authorized, this data owned by the bank can be shared with third-party applications, such as software applications, sparing users from redundant KYC procedures.
Read More: How Open Banking Streamlines KYC and Customer Verification
Benefit 2: Tailored Services for Enhanced Engagement
Online personalization is key to keeping customers engaged. By leveraging account data, you can gain insights into your customers’ banking behavior, preferences, and needs providing them with personalized services.
For example, customers’ transaction history and financials can be categorized and analyzed. In that case, your solution can detect patterns of frequent overdraft occurrences, prompting it to provide personalized budgeting tools and recommend tailored overdraft protection strategies.
Benefit 3: Faster and Cheaper Payments Options
Through the Payment Initiation Service (PIS), customers can pay directly from their bank accounts while remaining on your application providing fully embedded banking experience.
PIS can also boost your app’s invoicing features, like creating payment links for invoices or checkout pages. As a result, your customers can get paid more easily via mobile banking apps, a method that’s typically quicker and more cost-effective than other electronic payment options.
Thanks to fewer intermediaries, open banking payments also yield reduced transaction fees—an advantage for customers with high transaction volumes, allowing them to realize significant savings on processing cost
Read More: Why Open Banking Wins on Speed and Cost for Business Payments
Benefit 4: Maximized Financial Efficiency and Security
Account Information Services (AIS) let you provide a real-time unified snapshot of your customers’ bank accounts, offering a detailed picture of their cash flow. This feature helps your customers manage their finances better and automate their financial data retrieval by eliminating:
- manual bank login,
- time-consuming selection periods,
- local file storage (in PC)
- and uploading time into your software.
This, in turn, minimizes potential errors and data breach risks improving efficiency and security for your users.
Open Banking holds the key to staying competitive and thriving in the digital era. By embracing this transformative approach, solutions can gain a competitive edge, provide exceptional customer experiences, and achieve sustained growth. Streamlined onboarding, personalized services, faster payments, and heightened financial security are just a few of the key advantages that Open Banking brings to the table.
