Vice President David Hooper writes about the potential of open APIs to revolutionize banking in the spring edition of Financial IT magazine.
Open banking—which enables financial services companies to share customer data and, in turn, deliver more innovative and personalized services—has the potential to revolutionize the industry and improve the lives of customers.
In the spring 2022 edition of Financial IT magazine, David Hooper, a CGI expert on open finance and payments, writes that the technology to securely share customer financial data already exists. Using open APIs (application programming interfaces), banks, credit unions, insurance companies and other financial institutions can connect and share data with third-party providers such as fintechs,
“Open banking is more than just banking and banking services,” Hooper says. “It’s about all aspects of a customer’s financial life and well-being.”
Services driven by open banking that are already in place, Hooper shares, include:
- Personal financial management (PFM)
- Access to credit scores and alternative sources of credit
- Credit improvement services
- Mortgage rates and home buying
- Debt advice
- Market/product comparison services (similar to travel industry sites that provide information on the cheapest flights, hotels, car rentals, etc.)
- Services to protect the financially vulnerable
Hooper notes that open banking is a top priority for industry executives, according to insights from our Voice of Our Clients interviews, which collected more than 1 million data points from 7,470 business and IT leaders across industries over the past 6 years.
With the proper security and governance in place for finance institutions and third-party providers, open banking can provide customers with more information and options in managing their finances, drive down operational costs through new technology, increase competition for the benefit of customers, and promote financial inclusion by making services more accessible, Hooper writes.
Institutions that lack the technology to support open banking can build or license it, or find a partner that will provide the technology as a managed service, Hooper says.
Read the full article (beginning on page 39) in Financial IT magazine.
