48% of people do not trust their bank to help them manage their finances during a recession, so how can these banking institutions and open-banking platforms expect to garner trust when engagement is clearly not there? Open banking indeed has revolutionized the way financial institutions interact with their clients evolving at an incredible pace.
Public confidence In New tech?
In 2022 ‘Banking Disruption Index’, was launched which is a quarterly assessment of customers attitudes toward their bank’s digital know-how. This index will help understand whether consumer sentiment towards digital banking is evolving at the same pace as innovation is taking place and whether banks – traditional and challengers need to reassess their digital offers. As we move into 2023, clients and banking institutions are battling a cost of living crisis which has impacted confidence irrespectively. This impact on financial confidence will have long-term consequences if action isn’t taken to help strengthen the belief that corporations and consumers have about their money, and how best to manage it. This is where the value of open banking financial transparency joins us.
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What Is Open Banking?
The concept of “open banking” has existed since the 1990s, when banking institutions across Europe sought to eliminate the siloed approach to the banking domain. Open banking has rapidly become the foundation of a new generation of financial service applications that have had a significant impact on how clients and banks manage their finances. However, open banking has a ways to go before it can improve financial literacy and client engagement with their financial institutions. In the Open Banking Impact Report from 2022, 77% of respondents stated that they now have an accurate understanding of their financial position as a result of utilizing open banking services, which included real-time transactions, cloud accounting, and increased account accessibility.
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Above is the graphics which clearly highlight the scenario before open banking and the scenario after open banking was launched. We can clearly notice the desired difference between both sides before and after blockchain came into force in the real estate domain for the comfort of the buyers and sellers. With the help of API’s consumer application, the entire work has been made easy and transparent.
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Impact Of Open Banking On The Future Of Consumer Financial affairs
The significance of clients’ trust in their financial data cannot be overstated. This relatively high level of banking sentiments, such as seamless and real-time transactions, increasing transparency, and a significant improvement in communication between banks and customers, is largely attributable to the inherent nature of open banking. The banks’ ability to adapt to the latest technological trends in the industry is a further reason for their customers’ high satisfaction.
Prepare For 2023!
The conditions are favorable for 2023 to be another prosperous year for open banking.
Positive sentiment surrounds the implementation of more prominent innovations in banking and financial control. As emergencies and economic downturns continue into the new year, banks, applications, and open banking platforms have a fantastic opportunity to demonstrate the value of their products during times of extreme importance. Through open banking in 2023, consumers will be able to increase transparency around their finances, improve their financial literacy, and not have to sacrifice anything in terms of security, with full transparency on where and how their transaction and account information is being used, all while enhancing customer service.
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