Evolve Bank & Trust is a national financial service institution combining banking and technology to provide clients with a unique and profitable solution. Their dedicated Open Banking division offers a wide suite of Banking-as-a-Service or “BaaS” products that enable financial services and transaction methods for a variety of businesses. In the following article, open banking is discussed, along with an overview of what it is and who might benefit from this service.
Open banking enables third-party financial organizations to provide consumer or business transactions, banking, and other financial services from banks. This is done using modern, best-in-class technology such as APIs or application programming interfaces.
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The practice ensures excellent networking of data and accounts across institutions for use by third-party providers, financial institutions, and even consumers. Currently, it's considered a major innovation and has reinvigorated the entire banking industry.
An Overview
Under
open banking protocols, banks host accounts and provide transaction methods for financial and non-financial businesses to embed into mobile applications. Typically, these businesses are mobile-first financial and technology startups, also known as fintechs.
Through APIs, fintechs can pass data to:
- Create accounts such as demand deposit accounts (DDAs)
- Issue cards through relationships with major card networks
- Aggregate information from multiple sources to get a better understanding of their end user’s financial needs
- Facilitate new transactions or change account information on behalf of the end user
Who Benefits from Open Banking
Simply put, open banking benefits everyone who uses the model — including customers, banks, and other financial institutions, and fintech companies. Fintechs are able to tailor banking services to particular segments of customers, which allows banks to open accounts for customers they may have not been able to reach before.
Benefits for Consumers
Traditionally, banks offer limited, one-size-fits-all solutions to their customers. But with this innovative practice, opportunities are created permitting consumers to choose services from multiple providers.
Specifically, the many customer benefits provided could include:
- Easier payments using smartphones and watches in stores, helping long queues become a thing of the past
- Less expensive and more flowing currency exchanges and international money transfers
- Access to an array of products and services, letting customers personalize their banking
- Access to all accounts in one seamless place
- The best deals on financial services with complete transparency
- The ability to discover their current financial situation within one smartphone application
- The ability to make quick credit decisions and choose how they want to pay
Benefits for Fintech Companies
The practice is enormous for the industry. Alongside
helping fintech startups and already established businesses grow, the service provides the following major benefits:
- Provides the perfect opportunity to meet customers' ever-evolving needs for better services, such as account comparison, credit applications, and personal management from one app
- Helps fintech businesses get ahead of the growing competition and diversify their offerings to acquire customers
- Increases customer retention and engagement
Benefits for Banks and Financial Institutions
To remain relevant in today's world, banks and financial institutions need to be customer-centric, and open banking is helping them do this.
Banks and Financial Institutions can transform their traditional banking services via open banking technology. Benefits include:
- Improving customer engagement by extending their services to new customer segments with ever-changing wants and needs
- Provides opportunities for banks to partner with fintech companies and gain competitive advantages
- Gives banks the ability to modernize and make savvier, foresighted decisions
The Global Leader of Open Banking: Evolve Bank & Trust
Evolve Bank & Trust maintains its financial services through its secured BaaS environment. The bank guides its customers through every step of creating their own financial space with the goal to benefits all users.
Their open banking solutions have been designed with flexibility in mind, ensuring they can be adapted to a variety of use cases.
Evolve Bank & Trust works with many different partners to create secure financial environments. These relationships include:
- Third parties (e.g., third-party payment processors, independent sales organizations, aggregators, and third-party senders) — Evolve Bank & Trust supports them directly and enables these organizations to offer BaaS solutions to Platforms.
- Platforms (e.g., merchants and fintech companies) — Use Evolve Bank & Trust Open Banking solutions and account structures for their end users.
- End users (e.g., businesses and consumers) — The end customers of a Platform that use Evolve Bank & Trust’s accounts to move money.
Open Banking has enabled Evolve Bank & Trust to offer customized and flexible solutions for over 450+ partners by understanding the business and its end users.
