27 Apr 2023
Open Banking is a revolutionary concept that is transforming the financial industry around the world.
It is a new way of banking that enables third-party financial service providers to access bank account information and payment services through secure application programming interfaces (APIs). Open Banking provides customers with greater control over their financial data and enables them to share it with third-party providers for a more personalised and convenient banking experience.
With Open Banking, consumers have access to a wide range of innovative financial products and services that are tailored to their needs.
In this article, we will explore the concept of Open Banking in more detail, its benefits, and how Third-party providers (TPPs) can use Open Banking at Nomo to help you connect your Nomo account to different service providers.
Third-party providers can benefit greatly from using a bank’s Open Banking service, as it provides them with access to a wealth of financial data that they can use to offer innovative and personalised services to their customers.
Open Banking allows TPPs to securely access data that is typically held by banks, such as account balances, transaction history, and customer information, through a set of standardised APIs. By using these APIs, TPPs can access this data in real-time, which can significantly reduce costs and improve efficiency.
Some potential benefits that TPPs can derive from using a bank’s Open Banking service include:
Increased customer engagement: By connecting with the data available through Open Banking, TPPs can offer customers a more personalised experience that is tailored to their individual financial needs and goals.
Enhanced risk assessment: TPPs can use Open Banking data to assess the creditworthiness of customers more accurately, which can help to mitigate risks associated with lending and other financial services.
Improved payment services: TPPs can leverage Open Banking to offer fast, secure, and low-cost payment services to customers, such as instant payments, real-time notifications, and automatic reconciliation.
Access to new markets: By using Open Banking to access customer data across multiple banks, TPPs can expand their services to new markets and customer segments.
Overall, using Open Banking can help TPPs offer more innovative and competitive financial services while also improving operational efficiency and reducing costs.
Giving permission to access data is always up to the customer. They also choose what to share and how long to keep it private.
It's equally simple to revoke that consent, preventing open banking services and applications from accessing their data or processing payments on their behalf.
Here's how Open Banking was created with security at its core:
Open Banking uses software and security systems that have been thoroughly tested for bank-level security. The customer will never be prompted to give their PINs, passwords, or login information to anyone besides their own bank or building society.
It’s a regulated service. To join the Open Banking Directory, a website or app (i.e. Nomo) must be governed by the FCA or another European National Competent Authority.
Only the customer has complete control over when, who, and how long access to their data will be allowed.
Open Banking allows different service providers to directly integrate with Nomo and access customer data when requested by the customer.
The third-party provider’s customers can link their Nomo account to their platforms, choosing to share their data held by Nomo with TPPs.
Customers provide consent and authenticate on the Nomo app to be able to give the TPP access to the data or to make a payment via the TPP.
To find out more about Open Banking, please head to our Help section.
If you are a third-party provider and interested in having your customers gain access to Nomo bank accounts, then please visit the PSD2 portal on our website.