How Open Banking will benefit your business

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The digital revolution of Open Banking has arrived and all signs indicate that it’s here to stay. The financial landscape has been transformed by the payment services directive (PSD2) and businesses are now looking to take advantage of its many benefits. This financial technology and the recent changes to payment regulations can help your company in 9 big ways:

1. Your payers will be automatically authenticated

Open Banking will automatically authenticate your customers so you’ll never have to worry about whether or not they are who they say they are. Their identity information will come from established banks, so you can have complete confidence that their identities are real. OB can also be used by consumers to sign direct debit mandates in a highly secure manner and with a high degree of authentication.

2. Your payments will be automatically authorised

Is a bank account real or fraudulent? Active, or inactive? Questions like these are answered with Open Banking API that can validate your customers’ ability to pay and flag things early if customer service need to reach out to avoid the potential for payment to be rejected. This is because when they sign up for your service they’ll be sharing data which includes but isn’t limited to the following:

  • The balance of their bank and building society accounts and the names of the owners
  • Information about any regular payments including standing orders, direct debits and their recipients
  • Transactional data like incoming and outgoing payments
  • Features of their accounts like fees, overdraft payments and rewards

3. You’ll get paid quicker

Open Banking’s APIs are integrating with leading payment providers, like PayPal, Worldpay and us(!) to help businesses get paid faster. In fact, with API banking, you can withdraw payments from their customers’ accounts without them ever needing to login to their online banking profiles. You’ll also be able to quickly and easily initiate payroll or reimburse expenses quickly, easily, and all from a single platform.

4. Your cashflow will be improved

The new payment regulations which have led to Open Banking’s new APIs will make your payments simpler and faster for the immediate availability of funds. Having an up-to-the-minute view of your actual cashflow allows you to be that much more responsive and make smarter, faster decisions for your business.

5. Your financial duties can run instantly and automatically by using Open Banking services to process your businesses payments

Trends in fintech show that consumers are increasingly interested in payment account-to-account methods, like Direct Debits, especially when it comes to subscription or recurring charges. The trouble with traditional Direct Debit is that banks take forever to process these transactions and the payment files are done manually, leaving them open to error. Open Banking and APIs have allowed third parties who are FSC-certified to offer direct debit and payment processing in a fraction of the time. Those manual payment spreadsheets disappear overnight, and you get assurance that your customer payments will be approved instantly and the funds settled into your account that very same day.

6. Consumers will have a complete overview of their financial health

Have you ever accidentally triggered an unwanted overdraft and then had to pay a daily fee as a result? Predictive forecasting will tell you when you’re likely to become overdrawn and let you make the necessary adjustments both quickly and simply from a single interface.

Open Banking will also let you see a real time view of your company’s finances which is blended with your credit rating. This will let you predict any issues that might arise during a loan application and then speak to lenders from an informed position.

7. Your finance applications will process much faster

Lenders often require that an intimidating amount of paperwork be sent when applying for loans but Open Banking eliminates that need. A single and simple data transfer of all the necessary information can be sent to an approved third party within minutes. This means that the time it takes for your application to be assessed and your offer to be made will be greatly decreased.

8. You’ll be able to extend your services

Let’s say you’re a fintech firm. If so, then Open Banking’s inherent data sharing and the resulting overhaul that’s set to come to the credit system will help you a lot. You’ll be able to easily find new overseas clients, negotiate better terms with your suppliers or even find new sources of capital.

9. You’ll be able to provide personalised solutions for your customers

Today’s customers want and expect more, and the payment services directive (PSD2) lets you give them exactly that. It allows them to share their private data with you so you can then use that information to provide them with personalised experiences. This means that it gives you the flexibility to differentiate between individual customers and provide bespoke solutions to meet their respective needs. This will increase your levels of customer engagement and happiness, not to mention your bottom line.

Are you interested in finding out more about how the financial technology known as Open Banking or PSD2 can benefit you and your business? Get in touch for more information.


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