The future of finance is already here.
It’s been touted as one of the most game-changing developments in finance since online banking itself.
Open banking is the ability to use your bank account like a digital passport, to log into different online services and securely connect your bank account to different apps.
Just like how today you use your Facebook account to log into a game and find all your friends, maybe you’ll use your bank account to log into a digital lender who’ll be able to quickly scan your account and determine that your regular wage makes you a low credit risk.
It could also pave the way for new services built on the enormous value of banking data, from more detailed spending analysis and prediction, to new types of mortgages and lending.
But this isn’t just a pipe dream, there are two places where you can already try open banking today:
This morning Fidor, a German digital challenger bank that launched in the UK in 2015, revealed an open banking tie-up with crowdfunding group Seedrs and wealth manager Nutmeg.
Fidor’s Katharina Rausch said the bank’s “affluent and financially curious customers” would be signposted to try these alternative investment opportunities, along with other partners being announced in the coming months.
The idea is that with a few taps Fidor’s current account holders can invest, without having to go through any lengthy sign-up process.
It could be a win-win-win for Fidor, their partners, and account holders too.
Anne Boden’s digital bank Starling has been building out its marketplace of connected apps and services, adding TransferWise, Moneybox and Tail in the last few months.
With TransferWise, Starling customers get direct, in-app access to transfer money abroad for a fraction of the cost of traditional international transfers.
Likewise, with Moneybox, account holders can round-up their purchases to the nearest pound and invest the change in companies like Netflix and Disney.
“By making it even easier for customers to save money as they spend, we hope our partnership with Starling will be the first of many,” said Moneybox co-founder Charlie Mortimer.
Just like Facebook was a revolution for our social lives, open banking is finally here and promises to be a game-changer for our financial lives.