Open Banking, a Trend that is Gaining Ground

01/03/2023

Open banking allows users and companies to control and share their financial information. What's happening in Argentina

Open Banking is an open conception of the management of people's banking data, who traditionally could only use them in agreement with the financial or commercial entity with which they had contracted a product. This trend, which is growing worldwide, gives consumers the mastery of their data to use it freely and share it with a third party, such as a Fintech, another bank or a digital platform.

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"At Mastercard, as a technology company, we believe that Open Banking is a fundamental pillar for the financial ecosystem, since it is intimately linked to the rise of real-time payments," says Bruno Pisani, Head of New Payments Platforms at Mastercard for Cono Sur, a company that provides solutions for this type of payments, faster and more transparent than the use of cash or checks.

The advantages of Open banking tools pass on to consumers. "The massification of payment, savings and investment applications translates into important benefits for businesses and SMEs, which can count on more and secure payment alternatives to offer their customers, while promoting competition and reducing costs for the consumer. Open Banking also has an impact on reducing the use of cash, which contributes to combating the informal economy," adds Pisani, an executive at Mastercard.

With Open Banking, companies can manage their payments and collections optimally, make transfers in real time and obtain greater visibility over their finances. In this way, everyone benefits.

Mastercard's New Payments Index 2022 study, a global survey of more than 35,000 consumers from 40 countries around the world, revealed that "more people use Open Banking than they know themselves: barely half know what it is, but two thirds use it to pay their bills or manage their finances."

Globally, 64 markets (including the 26 countries of the European Economic Area) host industry-oriented or regulation-driven Open banking initiatives.

On the other hand, according to the report Trends in Embedded Finance and Open Banking, from the Argentine Fintech Chamber, seven out of ten Fintechs in Argentina have initiatives for Open Banking or Embedded Finance in their organizations.

Meanwhile, Mastercard offers Open Banking tools that allow fast, easy and secure data exchange and works together with key industry players to define and develop the rules and processes of this new trend.

What are the main obstacles for this trend to advance in Argentina? The companies and industries that use this tool agree that the fact that there are third parties that access our financial information can entail risks, that is why it is essential to work on regulation and to achieve fluid communication between banks, companies in the Fintech sector and users.

Source: https://www.cronista.com/