With the implementation of The Royal Commission, there have been major shifts in the FinTech industry, such as the opportunity for open banking. Open banking essentially allows consumers to share their financial data with third parties such as financial institutions or banks through the use of APIs. This way, the third parties can provide services that are tailored to the consumer.
As a result of this increased level of transparency, consumers can make better-informed choices about financial products that promote customer centricity while integrating an individualised approach. With this major industry disruption, consumers can expect new and innovative products that fit these new regulations.
Starting 1 July 2019, major banks will need to make certain data, including credit card, debit card, and transaction account data available at one’s request. Fintech Australia states that Australia is considering the implementation of an open banking framework similar to that of leading financial ecosystems such as the United Kingdom and the European Union.
Fractal, one of our startups that was founded in London, has been able to utilise the Royal Commission to scale their UK business here in Australia. The scaleup integrates open banking by changing how small businesses access financial services and products with their innovative technology and services offered to clients.
As the SME funding gap continues to grow, with a ~£59bn gap in the UK market, Fractal is committed to giving businesses the power to make informed financial decisions by having increased access to their data. Their suite of APIs enables financial institutions to reimagine how they provide financial products and services to their SME clients. SMEs are crucial to global economies both for wealth creation and for the people they employ.
The rise of open banking presents new opportunities for the creation of new products and services, as well as keeping competition alive among firms.