| Pub. Date | : October, 2021 |
|---|---|
| Product Name | : The IUP Journal of Accounting Research and Audit Practices |
| Product Type | : Article |
| Product Code | : IJARAP411021 |
| Author Name | : M Saritha |
| Availability | : YES |
| Subject/Domain | : Finance |
| Download Format | : PDF Format |
| No. of Pages | : 6 |
Traditional banking is gradually losing its sheen and technology-enabled banking is making rapid strides. Later, providing better customer experience, new ways of generating revenue to banks by partnering with Fintech companies and efforts of Fintech companies pitching in for new customers become easy. Finally customers, Fintechs and banks are benefitting from leveraging technology. Banks today are compelled to innovate and search for new revenue models to sustain competition. Earlier banks were working in a closed environment and now they have to embark upon collaborative environment. With the pandemic affecting the nations and the emphasis moving towards digitization, it will give the necessary fillip to open banking.
Genesis of Open Banking
UK Open Banking Working Group (OBWG)
and PSD2 (Second Payment Services
Directive) in Europe are the pioneers who
have jointly paved the way for open banking
(https://www.openbanking.org.uk). PSD2 in
Europe is also known as open banking. The
joint UK and EU directive came into force
on January 13, 2018, and it forces the nine
big banks, namely, HSBC, Barclays, RBS,
Santander, Bank of Ireland, Allied Irish Bank,
Danske, Lloyds and Nationwide, to publish
financial information of customers held with
them to third parties (usually Fintech
Companies) via APIs (Application
Programming Interface) (https://www.
thehindubusinessline.com/money-andbanking/
open-banking-ushering-in-a-newworld-
of-opportunity/article22694808.ece).
The third parties should be authorized
entities as AISP (Account Information Service
Providers) under FCA (Financial Conduct
Authority) to utilize the APIs of banks. FCA
is the regulatory body of financial services
firm and financial markets in the UK (https:/
/www.fca.org.uk/).