The rise of open banking is transforming how people use and interact with their finances. Open banking enables financial providers to offer more flexible and varied services for their customers. Open banking allows customers to share their financial-related information with authorised third-party providers. These groups can use this data to create a more bespoke service. In other words, open banking is a regulatory system that drives innovation and competition within the finance market. Using information effectively will encourage banks to deliver better services for their customers.

In Europe, open banking is focused more on expanding the traditional banking sector and increasing competition between the existing banks and new fintech companies by applying more customer data. People are requesting more open banking options as they want greater control over their data and broader access to various services that meet their requirements. A rise in these services results in more competition and better deals for the customer.

People are more aware of how businesses manage their personal information and demand a customised service from the finance industry. The rise of third-party systems is making customer lives easier by delivering specific services that meet the needs of each individual.

Big data is transforming the way financial service providers operate today. Measuring large data sets allows businesses to make quicker and more informed plans about their products and services. Big data has enabled new types of financial tools to develop that was not necessarily an option in previous years. The benefit of integrating big data across multiple verticals will be critical in the continued success of open banking.

Open banking offers several opportunities for small and large businesses. Sharing customer data means companies gain a better understanding of their customers. The continued rise of open banking will likely influence how businesses operate shortly. Those who recognise and apply the opportunities available with open banking are likely to be the ones that succeed in years to come. As payments become more focused on data and more personalised, open banking could potentially deliver new opportunities, enabling customers to connect directly with their bank and authorise transfers without leaving the mobile or online app. This type of example highlights how critical open banking will be in connecting customer data and providing an integrated and individual payment experience.

Big data is positively impacting the fintech industry and is likely to continue for some time. Finance companies who want to remain competitive will need to utilise big data and open banking to deliver the best available service to their customers. Some of the leading established businesses in the industry are acquiring or partnering with new fintech companies to remain competitive. For example, Visa recently purchased Sweedish-based fintech startup Tink, with only 400 employees, for a little over $2 billion.

The transition to open banking is happening and will play a significant part in the future of fintech and business activities. Taking advantage of the opportunities available in open banking can allow businesses to gain a considerable competitive edge. At the current rate of development, open banking will likely continue to spread across finance into other industries and quickly become the norm.