Open Banking Working Group takes banking to the next level with Open Banking Standard
The Open Banking Working Group has introduced an Open Banking Standard framework to teach people how to create, share and use open banking data, no matter if they own it or simply access it. The guide is established and maintained in a collective and transparent manner and is aimed to improve efficiency and competition and encourage innovation.
Consumers have become more comfortable with the idea of data sharing, but sending bank statements to third parties in machine-readable formats is not yet something that can be attained without difficulties. The same goes for bank product information -although it can be published on a bank’s website, accessing well-structured data is a difficult task for those who want to use this information to create a service.
The idea behind the Open Banking Standard is that banking requires open APIs to help offer free access to open data, as well as shared access to private data. It is worth mentioning that an ‘open API’ does not make the data it is transmitting open -instead, it is making its technology and the standard itself accessible. Only the data owner can grant permission to access private data through open APIs.
The perks of sharing and opening banking data
Many parties own the data produced during financial transactions, and both customers and banks have to offer explicit permission before their data can be used by third parties. Sharing and opening banking data has many perks, including the following: customers could compare and save on current accounts, borrowers could be offered better terms for loans, small businesses could save time on their online accounting and fraud monitors could cover and monitor more accounts.
This framework is also meant to help developers build services that can better meet customers and suppliers’ needs. Other innovators in finance will also have the chance to create better services with the help of the Open Banking Standard.
How can the Open Banking Standard be implemented?
The Open Banking Standard suggests that open APIs should be built as open, federated and networked solutions and should be available under a license which allows and encourages free use, reuse and distribution. Barriers to participation will be low to promote an engaged developer community. The Open Banking Working Group hopes to attract developers of all kinds, including individuals building their own apps, FinTech developers and agencies.
The Open Banking Working Group was created in September 2015 after HM Treasury expressed the desire to explore how data could be used to help people save, transact, borrow, lend and invest their money.