One of the main parts of banking service in this current decade is that it allows a company to reach customers in an unprecedented way. Through that, commercial banks can now create a more competitive and customer–friendly banking environment.
As we slowly approach 2025, we need to stay prepared for the changes that might happen in the banking industry very soon or over the next quarters. These changes will define how a bank can grow and what it means for the state’s economy.
In this blog, we will look into some of the most common processes of an open bank and how it’s revolutionizing the banking space.
- Expansion Through Open Finance
It’s through the use of different types of banking system that shares data of the customer in a centralized banking system, and that helps the bank to call themselves part of the open finance collectively, and through that, the partner banks can access the contact of the potential customers, and that helps to keep the investment.
When it comes to the concept of open banking, the following things can change the way how er perceive banking services. It’s the more competitive banking infrastructure and customer-friendly banking services through digital products that help to make better-personalized services.
- Helps to Increase the Consumer Adoption
When it comes to the role of consumer adoption open banking system must have the right loan agents who are working for these banks and are interacting with the customers and suggesting various products that are essential for bringing more customers on board.
With awareness, the open banking system will come with more digital-friendly applications and that will enhance the consumer’s experience in banking services. It helps the customers and banks to monitor better financial insights and increased security measures, which will further help the consumers to adopt those digital products.
- Helps to Improve the Data Security and Privacy of the Banking System
Open banks are the more advanced and nuanced way of banking, which has learned from the mistakes that banks have made in the previous decade, and through advanced technology, banks are more resilient in data security.
By 2025 it can be expected the regulations around digital banking will become more firm and will protect the interest of the consumers. Banks in the system of open banking will need to implement proper KYC methods such as biometric identification, using blockchain for storing data, and AI driven tech for better processing.
- Integrating AI and Machine Learning in the Process
The role of AI and machine learning is paramount as it allows the banks to use this technology to make the process faster. AI and ML are by far the innovations of the century and will further reshape every aspect of the banking industry.
Under the commitment of the open banking system, it’s possible that the tech of the open banks will reduce manual interference, and people can solve their queries through the use of an AI chatbot. Now, a customer can resolve queries throughout the week and 24/7.
- Standardization of Global APIs
In the open banking structure, banks have multiple APIs, and previously, banks were not comfortable using different APIs. Now, through the use of the standardized APIs of open banks, it’s possible for banks to integrate banking services smoother and reach the customer much more efficiently.
For example, the finance DSA apps can also keep the bank’s user interface. That way, a DSA partner can finalize the product that the customer wants and show multiple financial products that the customer might need, all from a single app. This will happen in open banking, which has standardized APIs and can help customers know everything from one place.
- Increase in the Collaboration Between the Banks and the Fintechs
Finally, it will increase the act of collaboration between the banks and the fintech companies as it gives the banks theb exposure to get new customers. It also allows the fintech companies to get banking partners, which will increase the array of services that the company can provide because of their partner banks.
These are some of the predictions and trends that can happen in 2025 due to the rise of the open banking culture.
