Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Banking

How will Revolut’s move into open banking affect us?
How will Revolut’s move into open banking affect us?

Published : , on

By Richard Mathias, Senior Technology Architect at LiveArea

Despite current uncertainty, the financial services sector is experiencing transformative change year on year. Innovation in banking has traditionally been a cumbersome process, but these new players have changed how things are done, applying lessons learnt in other industries to keep established players on their toes.

Among these innovators is Revolut. The company had a busy start to the year, tripling its valuation to £4.2bn, making it the most valuable FinTech start-up in the UK. But perhaps more significant was the company’s move into open banking, news which went somewhat unnoticed.

The implications of this announcement cannot be overstated, having the potential not just to transform personal finance, but the economy as a whole.

Personal finance meets convenience

To begin, the move into open banking makes Revolut the first provider to be authorised as an Account Information Service Provider (AISP), meaning it can now securely use UK banks’ APIs (Application Programme Interface).

In layman’s terms, it means they can now act as a single, unified interface for all of an individual’s or business’s financial information. Playing into rising demands for convenience, it makes it possible to connect external UK bank accounts to Revolut, giving consumers and businesses a 360 view of their balances, transactions and everything related to banking within a single application.

The implications cannot be overstated. One-in-four UK consumers have one or more current accounts – when it had previously been a pain to manage multiple accounts across different banks, account types and locations, these pain-points are effectively eliminated. Open banking will encourage consumers to be more agnostic with credit cards and savings accounts. It could well spell the end of bank loyalty.

Opening up new possibilities

Revolut’s announcement made it a pioneer even among challenger banks. Now all eyes are watching to see if the system of open applications works effectively.  And it’s easy to see why – theoretically, it will open the door for additional functions of AISP for other sectors besides banking.

In retail, we could see it applied to functions that have difficult relationships with acquirers and credit providers. For example, we could see the emergence of a single refund/credit company, delivery, or inventory buying application which looks at the entire market.

Here, it’s the digitally native challenger brands, similar to Revolut who are best placed to take advantage of these new functionalities. In contrast to high street retailers, these companies have fewer obstacles to innovation, enabling them to be much more agile when implementing new initiatives. Expect companies, like Asos, Boohoo and of course Amazon, to start testing the boundaries of what’s possible.

Prioritising security

While the announcement could be a kingmaker, it does come with risks. With APIs opened up to third parties, open banking makes organisations vulnerable to potential cyber adversaries as they’re no longer able to hide critical applications behind firewalls – so what would happen if they were to suffer a data breach?

The banking industry typically leads the way for security, but a huge amount of responsibility falls squarely on Revolut’s shoulders. After all, any stumble or misstep could result in severe financial and reputational fallout and halt open banking in its tracts. This means that API security is more critical than ever for the company to mitigate any potential threats.

All eyes watching

 Revolut took a gamble by moving into open banking. With  2019 going down as the worst year on record for breaches resulting in exposed data, security is of the utmost importance.

Revolut’s announcement makes it clear that the retail banking model as we know it is fading away. Open banking provides consumers with long sought-after convenience and flexibility, giving them easy access to multiple bank accounts under one interface and eliminating the traditional pain-points. Whether or not they make it a success is difficult to say, but all eyes are watching to see if the project yields the hoped-for results.

Uma Rajagopal has been managing the posting of content for multiple platforms since 2021, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune. Her role ensures that content is published accurately and efficiently across these diverse publications.

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post