New technology in business is never often just so cut and dry as being an addition to your operations. Instead, new technology can have implications that drastically affect how your customers engage with your content, your brand, or even your entire industry.
Open banking is a prime example of that. Falling behind the curve might have your customers looking elsewhere, but in order to best integrate open banking into your services, you need to understand what it has to offer – and why businesses seem to prefer it over traditional closed banking systems.
Security
Upon hearing about open banking platforms, one of the first thoughts you might have is that they aren’t as secure as closed banking systems. This might seem to be the case at first due to the lack of direct communication that has to be made with the banking systems themselves, but the security is simply hidden and more embedded. In fact, many professional open banking platform services make security their priority, allowing businesses to develop a more efficient system without causing greater risk to the financial security of their customers.
Any breach in this regard would surely backfire on the provider and the third-party business that the customer was using, meaning that ensuring a secure platform is in everyone’s best interest.
Efficiency
The ‘why’ of why businesses might prefer an open banking system to a closed one simply comes down to efficiency. Many businesses, like those in e-commerce, might find that through open banking platforms they’re able to more directly process transactions and reduce the costs associated with traditional payment systems. If more transactions can be made in a more straightforward manner, this might make the whole process preferable to both customer and business – improving the customer experience and potentially increasing the chance that they’ll come back again.
In a world where convenience and efficiency are chief selling points of any user experience, the ability to streamline a transaction down to its bare essentials might appeal strongly to customers. Even if the time being saved seems slight at first, going back to a business that doesn’t opt for open banking might demonstrate the gulf in the experience.
Information
Outside of the transaction itself, there is also information to be gleamed from this shift that might prove beneficial to your business down the road. Those in financial sectors, for instance, might benefit from being provided better visibility to the raw spending information, giving them a better understanding of spending habits and how to improve customer engagement. This might also be of interest to the spender, as it could potentially give them a greater insight into where problem areas are and how they could rectify this.
Due to the unfamiliarity that some audiences might have with open banking, emphasizing the benefits that it can have for customers might help people to be more on board with it, especially if they’re skeptical about how it might differ from their more traditional banking systems.