The legendary former president of the United States of America once referred to banks as the master of all the country’s progress and industry and rightly so. Today, there is not even a single reasonable individual out there who would disagree with the idea of banks being the epicenter of any country’s progress and development. It is almost impossible to realize true national progress and prosperity unless the focus is put entirely on the advancement and better facilitation towards the banks that run the national economy.
Thanks to the advancement of technology and those striving every day to make things better and smarter, Banking is no more a thing run on conventional models. Digital banking or what is aptly termed as internet banking has entirely changed the face of what it means to bank efficiently regardless of what end you are.
Amongst all the advancements that are impacting banking systems positively all across the world today, Open banking is perhaps the one that needs the maximum attention and understanding. Being anticipated as something that will change the idea of banking forever and surely for better, Open banking is not a concept too complex to be understood. However, it is a little technical and requires some explanation.
So, if you are wondering what open banking is and how is it going to change the whole scenario of banking within India, keeping on reading this article while trying not to get distracted will surely be of great help.
The Idea of Open Banking
If you are someone into banking and monetary transactions through online banking and all the digital and smart banking solutions, you will surely be aware of APIs of have, at least, heard of them. Standing for application programming interface, these APIs allow the related companies to share information with one another in a fast, secure and efficient manner, thus allowing for ease of transactional workouts for the clients of banks. All these APIs and it’s working is what leads to Open Banking.
Open Banking uses these APIs for its working and let the banks to share their transaction and accounts related detailed with a third or outside party in a secure manner. This sharing of data between the banks and third parties is what makes any bank’s working fall under the realm of Open Banking.
Using open banking solutions, Banks make it easier for their customers to carry out and progress in their daily monetary matters with greater ease and in a speedy manner. Open Banking has given rise to very easy and fast payment solutions for individual vs. corporate clients and has made the process of sending payments to anyone far more secure and fast than it was ever before.
Open Banking is surely the future
With its initiation dating not too far away in history, that is in 2015, Open banking has set new records of progress and practicality with which it has been brought into use. Just in 4 years, Open banking has become more than a trend. It is now becoming more of a necessity for banks to allow for Open banking if they really want their services to be used by a considerable number of clients.
It is being anticipated that more than 64% of individuals and around 70% of SMEs will be resorting to Open banking completely by the end of the year 2022.
It is, indeed, a matter of great pride that the Indian government and banks have put in a lot of effort and consideration when it comes to adopting Open Banking solutions. After the initiation of UPI and with the famed YES bank in India adopting Open banking as a part of their systematic transactional exchanges, the Indian economy embarked itself on a journey with a surely a future that is all bright and golden.
Open Banking and it’s future in Indian Economy
It would not be a wrong claim to make if we say that, in comparison to other counties, Open Banking has been adopted in a better and more useful manner within India. With almost all of our recognized banks adopting the mannerism of Open Banking in two different but related aspects to ensure a better and safer transactional mechanics, it is more than safe to say that Open Banking has a lot of positive changes to bring about in the Indian Banking and economy.
Probably the most severe and the most expressed concern of people against Open Banking is that related to their data. People today are more than educated and therefore more than keen to know if their personal and banking details are really safe when shared with third parties under Open Banking. This is where the Indian government and the Indian banks are likely to leave everyone else far behind.
Thanks to the government and its strict laws that have made Open banking a very convenient and safe practice within our country. Not only we, as customers, have the power to control if we want out personal information to be shared openly but we can also be more than sure that even if we allow our information to be shared, it is entirely safe and Open banking in no way will let our data and privacy to be breached by scammers or malware attackers.
The fact that Open Banking in India is at a rise but banks adopting it still are under an obligation to keep user’s priorities and consent as their topmost consideration and priority is in itself as the assurance of how safe are we going to be in future with the rise of Open banking all across the country. Needless to say, there is surely going to a fresh wave of economic and industrial prosperity with the rise of open banking in the country.
If something as beneficial as Open banking is coming with \guarantees of user’s privacy staying intact and unharmed, there is no reason one cannot see the future of the country prospering more than ever before.