Expertise to help you reach your goals and maximize the value of your financial data.
April 19, 2022 | 20min read
Most of us have heard about Open Banking but what is Open Finance and how does it differ? Jane Barratt, Chief Advocacy Officer, at MX shared her perspective in our recent MX Product Forum.
Open Banking allows consumer-permissioned data and services to flow between banks and third-party providers. But, it generally only applies to retail banking accounts. Open Finance applies to the broader ecosystem and not just retail banking.
Open Finance puts the consumer in control of their data. Think about what this will mean. More permissioned financial data means more opportunities for financial institutions and fintechs to create products and services that help consumers achieve their financial goals. It means better security, customer experiences, and innovation.
A recent survey from MX showed 60% of people want to see advanced identity protection from their financial providers. Open Finance improves security and reduces risk by using tokenized access so that consumers don’t have to share their username and password to connect their accounts. Removing credentials altogether also ensures more reliable connections that won’t break when usernames and passwords are updated.
Better Customer Experiences
People want the convenience of accessing a wide variety of products and services. But as a result, few financial providers — and few consumers — have a complete picture of a consumer’s finances in one place. Open finance best practices and APIs make connecting accounts and sharing data more seamless and frictionless. This creates a better experience and can help drive call center volume down. It also gives consumers more digestible information and insights to make smarter financial decisions.
For financial institutions and fintechs, Open Finances enables data sharing that will help them more effectively scale and serve account holders. They can use actionable, data-driven insights to better meet market expectations, uncover new revenue streams, and iterate on innovative new products and services.
Visit What is Open Finance from MX to learn more and see where your organization falls on its journey to Open Finance.