3 practical ways for any business to leverage open banking
All these changes and challenges businesses must put up with… Add the pandemics to these dynamics and we get an environment difficult for businesses to bloom in. The good news is that some great opportunities are emerging and open banking is one of the most important.
What is open banking and what can it do for businesses?
Open banking is about granting access to businesses bank data, from any bank or country, thus allowing them to leverage it in many ways. One example is building apps around this data, collecting it, translating it into financial behaviour insights. Making instant payments directly from the bank account is also an open banking advantage, helping you, as a business, function better.
This article digs deeper into open banking opportunities for companies and shows how businesses can save resources, increase profit, and plan their finances properly.
1. Optimise current business workflow and risks = save resources
You can easily automatise part of your business internal and external processes, even payments, making them flow frictionlessly. Thus, you get rid of expensive, manual, repetitive processes and are able to focus on business development and exploiting valuable opportunities.
Businesses’ expenses are cut with open banking by:
- Full automation of accounting, including bank and non-bank accounts, with no avalanche of excels;
- Providing access to financial information to the auditors, tax authorities, potential investors in automatic way;
- Obtaining loans with better rates based on the company’s complete financial history;
- Receiving or sending payments with minimal fees, 5 to 10 times lower, with no rolling reserves;
- Monitoring your financial situation in real-time helps identify vulnerabilities, like unnecessary expenses;
- Switching to a more affordable service provider, thanks to the brokers’ price comparison and spending pattern identification;
- Preventing bank cards frauds, since you don’t need to provide authorisation details (CVV, PIN, PAN);
- Automating salaries and taxes’ payment process through a single interface.
2. Readjust your offer to market’s expectations = increase profit
There were serious shifts in consumer behaviour in the past years, enhanced by the pandemics’ footprint. Your offer may not match the market’s needs anymore. Merchants, banks, and other service providers, with small exemptions, haven’t been interacting with customers as much as they used to in the pre-Covid times.
Running machine learning algorithms on top of the fetched transaction data unveils interesting facts about your customers’ spending habits. Open banking allows to learn from it and:
- Improve customer experience with tailor-made services and advice that are delivered at the right time;
- Offer value-added services, upsell, cross-sell, and deliver what bank data shows the client needs;
- By filling in some data automatically, the customers’ hustle is reduced and so is their dropout rate;
- Launch precisely-targeted marketing campaigns.
With data enrichment, businesses stop selling in the dark and gain competitive advantages.
3. Plan your financial future properly
Many businesses fail because they lack visibility and clarity over their capital and expenses, which prevents them from properly preparing for the future.
Saving resources and increasing profit sounds good but you need to plan for the future, as well. Once you have decided on how you want the business to develop in the future, the next step is deciding on the funding of those plans. There are special open banking-based tools, helping companies:
- Confirm that plans can be funded;
- Identify areas of potential future difficulty and come up with solutions for them;
- Forecast financial scenarios, based on performance measuring and pre-planned parameters;
- Easily compile the required financial data and metrics to be presented to potential investors;
- Make financial decisions in a well-informed and educated manner.
These tools can also alert the business owners about cash operating in manners different from those that bring profit. Thus, open banking brings businesses the necessary financial accuracy.
Ready to start using open banking?
Open banking brings great perks to businesses but leveraging it needs some help from outside. There are plenty of technical, compliance, and security matters that are overwhelming for a company alone to cover. Connecting by yourself even to one bank is somewhat similar to trying to overcome a labyrinth, spending endless human and time resources on it. Here’s where Salt Edge helps by taking care of all those aspects and more for you. It’s all about getting started.
About Salt Edge
Salt Edge – a financial API platform with PSD2 and open banking solutions. The company has two main vectors of activity: enabling third parties to get access to bank channels via a unified gateway, and developing the technology necessary for banks to become compliant with the directive’s requirements. ISO 27001 certified and AISP licensed under PSD2, the company employs the highest international security measures to ensure stable and reliable connections between financial institutions and their customers. The company is integrated with 5000+ financial institutions in 50+ countries.
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