Open Banking Means New Revenue Streams for Financial Institutions
The banking world is changing rapidly. In September 2019, the Payment Service Directive 2 (PSD2) went live in the European Union, marking a fundamental milestone towards the advent of open banking, which aims to deliver new ways of connecting banks and financial institutions to their customers.
The new EU directive seeks to give customers more choice, allowing the share of their financial data with third parties. While this is going to be a cumbersome task for traditional financial institutions to adapt, with banks worried about losing their grip on customer's data, if done right, open banking can be considered a force of good for the industry as a whole.
In this sense, it is crucial to understand that actually, this is an unmissable opportunity for banks and financial institutions to win back their customers, increase customer engagement and meet their changing needs. A key thing to understand, to move in that direction, is the potential of Application Programming Interfaces (APIs) and the importance of creating pricing policies for those. With a pricing policy, financial institutions can develop a business model on their APIs and build what will probably be their fastest growing and largest revenue channel in the future. Open banking represents a real possibility for financial services providers to increase their revenue, rather than just being a threat to their bottom line.
In particular, the PSD2 directive makes space for the creation of a new layer between consumers and banks, giving them the opportunity to initiate payments between bank accounts on consumer's behalf and broaden their offering with a new range of services. Providing, at the same time, an alternative to credit and debit cards, to pay online.
In fact, by using open banking APIs to process payments instead of cards, there's the possibility of saving a significant amount of money and streamlining the whole process. With the concrete chance of attracting new forward-thinking business clients looking for the most innovative payment technology solutions.
At PaymentComponents we wanted to radically simplify this transition towards open banking and we built aplonAPI. A product that enables financial institutions like yours to offer Banking as a Service/Platform (BaaS/BaaP) solutions to your clients and monetize your APIs. It comes to you equipped with pre-built and tested APIs, packed in a ready-to-use sandbox. And with a developers portal that you can customize and brand as you want. To help you generate value from day one. Thanks to an API connected FinTech ecosystem of AISPs and PISPs, we are able to empower you to open up a new revenue channel to put you ahead of the competition. Are you interested to learn more? You just need to schedule a demo with us. We will be glad to provide all the details and answer all your questions!