A wave of change has descended on modern finance, and the tide has given rise to “open finance”.
Our financial data is largely inaccessible today, confined to our financial institutions for analysis and marketing. When your bank sends you a message encouraging you to take up a personal loan or up your credit limit, it is doing so after analysing your data. In the early 2010s some financial institutions argued that data on their platforms belonged to the institution.
Imagine topping up your investment in real-time because your investment provider knows you have money in your bank account, comparing interest rates for a small business loan with no credit history, or applying for a cellphone contract without having to obtain stamped bank statements.In an open finance world there are two new groups of companies, account information service providers and payment initiation service providers .
The FSCA needs to develop approval and oversight processes to ensure the public is protected from ill-equipped companies and bad actors. While we wait, the AISPs and PISPs mentioned above use screen-scraping to enable open finance outcomes. Screen-scraping — a technique whereby a third party logs into a customer’s banking profile as if it is the customer — has arisen out of the need to create an environment that open finance itself seeks to create. User growth by fintechs such as Mint , Curve and 22seven are evidence of real demand from consumers to transact in more innovative and convenient ways.