Is open banking the key to transformation of digital financial services?

Over the years, Kenya has emerged as a country highly vibrant in the fintech space; but in a world where evolution is a constant, the question is what next for digital financial services? The answer seems to be open banking.

Open banking is a financial services term as part of financial technology that refers to: The use of open APIs that enable third-party developers to build applications and services around the financial institution. The term might be new for consumers in the East Africa, however, open banking earlier in the year marked its first anniversary in the UK.

According to an article on computer world UK, even though YouGov research from August showed that 72 percent of UK adults had never heard of open banking, the success of the regulation should be measured more by overall adoption of open banking-enabled services, and less on name recognition.

East Africa should learn from this, as open banking starts to become a reality in the region, just recently Myriad Connect announced that they are exploring opportunities for open banking in East Africa. The company announced this during a Myriad Connect event, covered by CIO East Africa.

Open Banking drives transformation in digital financial services by empowering consumers to own and share their financial service data and to leverage this data to deliver enhanced capabilities into the marketplace.

“Open Banking enables consumers to have more choice and hence control over their finances by leveraging the power of digital,” says Richard Johnson, a specialist in the convergence of Digital Technology and Financial Services, who facilitated the session held at Radisson Blu Hotel in Nairobi.

Johnson added that Open Banking initiatives are being put in place to empower consumers to take greater control of their financial information and how and who it is being used by. By taking control of such data, he says, consumers are equipped to manage their finances better and are able to decide who they want to share their information with, in order to make it cheaper and easier to find superior products and services.

Open banking thus gives consumers the ability to be masters of their own fate and thus enables the transformation of digital financial services to take place seamlessly.

CIO East Africa shall be discussing the topic of, TRANSFORMATION OF DIGITAL FINANCIAL SERVICES, which will be presented by Victor Malu, Director, Financial Services Deepening, during the East Africa Fintech Summit which will be held from the 22nd- 23rd of May 2019, click here to register for the event and learn more about Fintech.