The Case for Open Banking: Benefiting The Underserved

Progressa | Philipp Postrehovsky | July 31, 2019

Canadian open banking opportunity index - The Case for Open Banking: Benefiting The Underserved

The Open Banking Opportunity

The consumer owns their financial data, not the bank.

B2B:  Fintech companies are able to securely access a consumer’s financial information without having to use third party services like Decision Logic.

B2C:  More options to shop and compare products, achieving the best products and rates. More educated and active financial service consumers.

 

Benefits

  • In the open banking era, you’re linked into alternative sources of value and not being driven by a closed ecosystem/closed banking monopoly which restricts the consumer to access resources they need.
  • Consumers can get the help they need in a streamlined manner when going through challenging financial times.
  • Banks can migrate risk to fintech companies and fintechs can provide more diverse financial services and advice to better serve the consumers.

See:  Open banking data tapped to speed up laundering checks

Risks & Mitigation

  • To ensure the protection of customer data, stringent compliance standards need be implemented along with regular compliance verification.
  • Any security breach or misuse of data could significantly harm the banks’ brand reputation and confidence they currently hold, which would instantly jeopardize the program.
  • The Government needs to play a leadership role to mandate and enforce standards in order to create a unified vision.

 

Some Inspiration: The Airline Industry

Travellers historically were required to contact incumbent airline companies directly in order to book or manage reservations, check availability, check in, and check arrival times. Modern standards in our airline industry placed the customers in control and enabled customers to decide what, when, where, and how they wished to consume airline services. This amounted to expanded and improved services for the would-be travellers. The modernization of the travel industry allowed for open functionality through secure APIs. This re-visioning of the industry enabled customers and third-party apps to perform most, if not all of the travel functions, without the need to ever contact the airline through slow, analogue channels.

 

Open Banking has Already Arrived Overseas

Open banking would position us as a global leader alongside the European Union and UK.  PSD2 (Payment Services Directive 2) arrived in Europe last January, forcing European banks’ to open up their API’s to fintech and other financial companies.

Our Stance

The democratization of personal banking data while maintaining the highest level of security means happier consumers.  Progressa fully supports open banking, but companies need to be prepared to take on the responsibility of it. Canada’s current ecosystem is not prepared for open banking and it will take several years to become a reality.

 

Philipp Postrehovsky - The Case for Open Banking: Benefiting The UnderservedPhilipp Postrehovsky – SVP Marketing, Progressa

Philipp is a product visionary, brand builder and an award-winning marketer who has been involved in the Vancouver tech scene for over 15 years. In 2013 he co-founded RentMoola, which continues to be one of North America's leading fintech companies with the mission to eliminate the rent cheque and modernize rent collection for the enterprise. Before that, he was a brand leader for Mogo Technologies and Wonga Canada and began his career at Electronic Arts. He is the founder of Grind For Kids, a program that raised over $1 million for BC Children’s Hospital Foundation and sits on the Board of one of BC’s top independent schools.

 

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