Open banking. The art of the possible in 10 use cases.

10 open banking uses cases 

How can financial services companies drive real value and service clients better through open banking? A new report by Altitude Consulting and Axway details a number of use cases to help you visualize the art of the possible in open banking and imagine new ways to grow your organization’s capabilities, gain a competitive edge, and deliver superior customer experiences. Here are 10 of them:

No. 1: Account aggregation 

Open banking offers secure APIs for accessing financial account data and benefits all parties: banks, account owners, and fintechs. With open banking, banks have greater control and visibility into third parties that are accessing their clients’ financial data and the purpose for which the data is being used.

No. 2: Consumer spending insights 

Financial documents and data from external credit and bank accounts can bridge the gap between banking and buying, uncovering opportunities for banks to proactively engage customers. Customer life stages, psychographics, brand loyalties and other triggers help to create a personalized experience.

No. 3: Buy now, pay later 

BNPL (By Now Pay Later) fintechs use the banking systems to verify consumers’ identity, retrieve financial information, verify accounts, conduct KYC checks and make lending decisions. Consent management allows consumers to grant access to data for loan applications and credit approvals which improves conversion rates.

No. 4: Wealth management 

Wealth management with open banking capabilities makes serving customers more efficient. Customer permission to retrieve data from external accounts, and conducting a digital KYC, smooths onboarding for new and existing customers looking to take advantage of the bank’s financial planning services.

No. 5: Insurance Sales 

Banks can analyze customer data for insurance triggers to provide personalized insurance offers through online and mobile channels. Such triggers are found in personal information updates, purchasing data from external cards aggregated through open banking,
and location data from a bank’s mobile app.

No. 6: Personalizing products and experiences 

Open banking allows banks to combine data from external sources, including other banks, brokerages, credit issuers and investment managers, and combine it with first party data such as buying history, credit score, income, age and location, to build a deep understanding of each client’s unique needs.

No. 7: Bill payment and management 

Improved billing and payment capabilities offer customers more payment options and increase customer engagement. Open banking APIs let billers send bills directly through the bank’s channels and use detailed consumer behavior data to deepen loyalty and offer the right product at the right time.

No. 8: Tax preparation 

Open banking provides a number of tax preparation benefits. With a direct connection from bank systems to popular accounting platforms to retrieve tax data, banks will realize operational efficiencies, be able to serve consumer and business clients better, and reduce call volumes during tax season.

No. 9: Payment initiation 

Open banking lets consumers and corporations initiate payments directly from their online banking accounts without entering routing data, simplifying the payment experience. Multiple payment options are available within the same payment interface and payments are often processed in minutes or hours.

No. 10: Streamlining account opening 

With open banking, digital ID verification and cross- referencing with external accounts reduces manual input by the user, speeding account opening. Funding is done directly from another bank account via ACH transfers. Virtual cards allow new customers to make purchases as soon as the account is funded.

* Download this open banking checklist as a pdf