It is not a secret that fintech industries is a sector that is currently growing rapidly. The reason is influence of technology that running side by side with almost all sectors. One of them is financial industry. This is why the fintech business continues to grow and provide the best practice to its users.
Including use the latest technology that can facilitate the transaction process. Here we will discuss the Open Banking API which is commonly used to meet the needs of fintech service users.
For more details, see the explanation below.
What is the Open Banking API?
It must be admitted that Open Banking API term sounds quite unfamiliar to some people.
How come? To those who are still not familiar technology, pace of innovation and trends grow quite fast. This is the reason behind still many of those who cannot keep up with trends side by side.
However, as financial business player, it is crucial to know what are important things that currently happening in the industry. So does with Open Banking API.
In short, the Open Banking API is a system that provides services to access customer data in easier and secure way.
Usually, it makes financial institutions to access data easier through third party, which is Open Banking API service provider.
API itself stands for Application Programming Interface, which is a technology that acts as an agent between applications.
That means Open Banking and API are two inseparable things with interconnected process.
Open Banking Regulations in Indonesia
In Indonesia, the regulations of Open Banking has been set up legally.
According to bi.go.id, the National Open API Payment Standard has been set by Bank Indonesia.
This includes creating a healthy, competitive and innovative payment system industry that relies on a secure infrastructure for payment systems.
It is also include the technical standards of data security on the developer site page and the governance of the Open Banking API implementation.
In addition, the OJK also provides guidelines for the implementation of digital banking services that are protected in various laws.
This digital banking service includes account administration, transaction authorization, financial management, and other financial product services based on the approval of Financial Services Authority.
In Indonesia, several financial companies have used the Open Banking API. Including BCA, Mandiri, BNI, CIMB and many more.
Benefits of Open Banking
Many various financial services using the Open Banking API system indicates there are so many benefits that we can get.
Shall we find out the benefits? Here is more of the details.
Increase User Trust and Security
The first benefit is for financial companies that use the Open Banking API service, which gain user trust rapidly.
The reason is Open Banking API’s credibility to provide such satisfaction which is already known.
Users will feel more comfortable and safe to use financial services from the company with Open Banking API system.
Credible Data Sources
The next benefit of Open Banking API is the ability to collect more comprehensive data source.
In this case, the source of user data which collected by financial services will be more credible.
This data is collected directly from each user that use the financial application on their smartphones.
This is one of the reason why Open Baking API facilitates financial industry easier with its technology.
Innovation Opportunity for Industries
Innovation is so important for any type of business.
Including financial industry.
In other words, the Open Banking API is a facility that will encourage each financial service to continue with innovation in order to provide convenience for its users.
Having Higher Standards
Another benefit of Open Banking API is that it has higher standards.
It is also believed to bring benefits, both for fintech companies and its users.
It is related with Open Banking API that has been regulated by financial institutions, BI and OJK.
Their strict regulations need to be followed, so it will meet the standards to operate.
Including ensure the safety and comfort of users even more.
Earn New Users
Open Banking API offers various conveniences and comforts which apparently attract new users.
For example, the convenience in transactions, account opening, and also other financial services that can be done from in application.
It leads potential new users to come and eventually interested to try the experiences using this service.
Creating Nice Ecosystem for Products
Open Banking API enables financial services to have nice ecosystem for their products.
One of them is affiliated services with each other. This is why users always feel more convenience, especially with easier access to various services.
That is all, the brief explanation of the Open Banking API. Find out more information about financial and technology only on Finfini.