Fostering innovation and creating new customer experiences through Open Banking

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Open banking has been a notion explored by both incumbents and fintechs especially when driving the innovations agenda towards a more complete and experience driven financial services ecosystem. The emergence of Covid-19 has accelerated the agenda by allowing digital organizations to fast track their developments towards innovations while goading the traditional brick and mortars to adopt more digital ready practices.

As the shift in the digital space has now started to be more focused on key business areas such as customer experience, convenience, data integrity and so forth, regulators are now working together to establish open banking regulations to bring together a connected ecosystem whereby all the involved stakeholders from the consumers to the providers duly benefit equally.

The shift towards a more digitally dependent economy has now urged the new norm for digital phenomenon such as, cashless payments in the MENA region to flourish. With that being said, open banking regulations are allowing providers to take the next step forwards and supporting use cases such as cross-border payments, digital banking and aggregation. Organizations and regulators are now working more together with each other than they were before, a blessing in disguise, it has pushed forward the next evolution for the connected digital economy for the region.

Demands for more mobile solutions have leapfrogged years in advance as users are now ever more dependent on the conveniences and availability of these offerings at the touch of their fingertips has cemented the notion that going back to the old ways is almost impossible. Codebase Technologies have been at the forefront in helping traditional banks and upcoming fintechs, adopt the Open API revolution through its proprietary Fintegrator proposition which allows banks and fintechs to collaborate and deliver new innovative solutions in a highly secured environment.

There are various innovative use cases and examples of how the open banking agenda can benefit the MENA region including such as shared KYC services amongst banks and other incumbents. A concept where for example, a telco collects the customer’s information for offering mobile services and help service providers validate such information, provides an added convenience and saves cost of managing compliance allowing them to focus on delivering new shared experiences.

The EU/UK has seen a monthly growth of 16% in API calls from 180 million calls in October 2019 with 20 to 30 million calls added additionally per month. Average API availability sits at 98.48% which in turn allows for a continuously enriched digital ecosystem. Studies has shown that countries that lag behind on these regulations risk being left behind in the global markets thusly providing the Middle East a golden opportunity to embrace the open banking economy even more.

Another innovative use case fostered by open banking has been account aggregation and use of intelligently architected analytics. Allowing customers to link multiple bank accounts and enable intelligent analyzing of their expenses, budgets and etc to suggest beneficial recommendations on how they can save more money by giving them intuitive recommendations to seamlessly switch service providers such as utility, telco, internet and subscriptions.

Using the available provided data from the aggregated accounts, financial institutions can now analyze the readily available information on the customer’s financial health and help take and drive data driven credit decisions. Thusly this use case helps not only mitigate financial risk both to the customer and institutions but allows both parties to engage in healthier financial practices that foster better informed and effective decision making.

The market outlook in the MENA region with the presence of open banking aspires to enrich the financial and digital lifestyles of the consumers, although still working out many addressable pain points and challenges. Open banking is poised not only to help fintechs but also deliver connected experiences for RegTech, InsureTech, E-commerce and HealthTech sectors with a single aim to offer new and hyper personalize propositions to consumers.

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