When it comes to banking, open platform systems often have a competitive advantage over traditional banking systems as they bring out the best in users’ potential. As we all know, the open banking sandbox system has been around for millennia, but with so many banks competing with each other, not all of them are able to offer the same degree of customer interaction and service. That’s why businesses like ours exist; we provide an open platform that helps banks engage their customers more effectively than ever before.
Lowers cost of development and maintenance
One of the reasons why more and more financial institutions are going for this type of approach is that it lowers both the cost of new product development and maintenance. Moreover, a growing number of developers can easily contribute to the code thanks to an open-source approach. Additionally, with an open platform, you can bring forth a whole new range of opportunities and offerings for your customers.
New products and services
Embracing an open platform allows your bank to stay ahead of the competition. While your customers are being presented with new products and services to choose from – a feature that’s practically impossible with a traditional closed system – they are also benefiting from new and improved features, functions and security measures. In fact, one of the main advantages of open platforms is that you can leverage existing solutions from different sources in order to offer a holistic approach to your customers.
Greater customer satisfaction
The open platform banking approach brings about a win-win situation. While your customers are able to take control over their banking experience, you, on the other hand, can make use of improved services and offerings. That being said, you will see a greater degree of customer satisfaction as a result of continuous product development and support.
Increased revenue
Open platform banking can also bring forth new revenue streams that are not available in traditional forms of banking. You can be more agile in being able to recognize the wishes and needs of your customers, and you will also be able to provide tailored products and services as a result. Of course, that’s just one of the many things that you can do when you adopt an open platform approach.
Increased customer loyalty
With an open platform, you are not only able to increase customer satisfaction levels but also build greater customer loyalty. This is because people will feel more connected with your brand thanks to a greater degree of communication between your organization and the customers themselves. The level of engagement will be higher and it will extend to all your customers, not just those that are registered in your system.
Greater security
Security is also another advantage that you can enjoy as a result of an open platform approach. Thanks to the transparency of the code, data theft, and fraud risks can be significantly reduced. Additionally, the open nature of the platform enables banks to take advantage of complex data analysis tools such as natural language processing in order to have a better handle on their customers’ needs.
Open to new opportunities
As mentioned, open platforms are less expensive to maintain and you don’t need to build everything from scratch. You can join your current infrastructure with the modular solutions available in your marketplace, thus opening up a whole new range of opportunities for your bank. Last but not least, open platform banking allows you to take advantage of continuous innovation by tapping into the creativity and skills of numerous developers across various parts of the world.
Greater innovation
This is a call to all fellow people who care about the future of the global economy and their personal finances. The open-source movement is gaining momentum as more and more people realize that open-source software provides a viable alternative. The same applies to banking, which has a lot to offer open source solutions. There is no doubt that the banking system has evolved in recent years. But it still suffers from some serious problems that can only be solved with the help of open source solutions:
Open architectures and infrastructure will lead to better security
Open platforms enable third parties to integrate their own software, thereby providing many new possibilities for customers. Anyone is invited to implement any custom software for specific tasks, for example for online banking or online shopping. The same applies to third-party software that can be used in the bank’s own infrastructure, such as payment systems. This will increase the security of all banking systems, as well as online transactions, significantly.
Open time is a more effective way to manage time
When different systems and companies are involved in making decisions and developing new services, it is usually very difficult to coordinate and accelerate the process of development. With open platforms, however, everything can be done via distributed collaboration between independent people and companies working together on one platform. There is no need to coordinate different systems, as the platform itself is the common platform. This means that new services and capabilities can be developed much faster.
Openness will lead to more innovation
Most banks are usually not very creative when it comes to their strategies and products. They use similar solutions to run their business, but they are reserved when it comes to developing new solutions (e-banking, mobile banking, etc.). With open source solutions, however, you can create your own individual solutions that are much better tailored to the needs of your customers, both big and small. Although the risk of failure may be greater with open platforms, the benefits are also bigger.
Open platforms will lead to a more customer-friendly environment
Customers are increasingly demanding more transparency and control over their finances. Online and mobile banking is already widely used by most people today as they want to be in control of their own finances. With open platforms, customers will be able to develop their own solutions and tailor them exactly to their needs. By combining all the different open source solutions with each other, customers will be able to create their very own personal banking environment.
Open platforms will lead to reduced costs for banks
Open Source software is not free, but it can save a lot of costs for banks and businesses in total. The development of open source solutions is far cheaper than most proprietary software, and the maintenance costs are a lot lower as well. Most open-source software is also covered by large standard licenses, so it’s not necessary to have multiple licenses for each application that you implement. As an example: the OpenBanking Alliance distributed network will cost banks next to nothing in total.
Conclusion
For these 6 reasons and more, open-source software will play an increasingly important role in the future of banking. The Open banking Alliance is one of the many projects that are already forging the way for the use of open source solutions in the financial sector. Join us on our journey towards a freer, more flexible, and sustainable global economy.
