On the one hand, open banking has a number of advantages such as it facilitates competition and fair pricing, it allows customers to get better deals, it reduces barriers for financial services and most importantly it gives the control of the data to customers who provided the data. John Broxis, managing director of Preta/Open Banking Europe, says: "With this work, we are pleased to continue the mission of Open Banking Europe to describe and standardise Open Banking practices in
However, conversely, there are also risks and disadvantages of open banking. First, since it applies only to the financial sector, it creates unequal benefits and unfair practices where non-financial companies that are not subject to open data initiative can benefit from open banking without revealing their private data in return. This would create information asymmetries. Second, the risk of misuse of personal data will rise and this could lead to distabilisation of the banking industry. Third, there are no finalised controls, regulations and rules of the game. Hence, any disputes will be difficult to resolve. Privacy and security aspects of open banking require more attention from regulators.
Once these challenges are overcome, opening banking can become the next wave of innovation in the financial industry.
Copyright 2020 ACN Newswire . All rights reserved.
© Japan Corporate News, source