Many industry observers envision open banking becoming a U.S. reality within the next five years because the FinTech ecosystems that inspire open banking and data sharing have many innovative advantages.
The development of industry application program interfaces (APIs) and data-sharing standards is building, and pioneering open system friendly vendors and financial institutions have the opportunity to set the pace of future development.
Many banks and credit unions currently struggle to compete with FinTech, which has come to refer to the disruptors taking hold in financial services, in terms of innovation, personalization and speed. Non-bank providers are also aggressively targeting financial submarkets such as consumer and business loans, savings and personal financial management services, easier money movement and accessibility.
The use of open APIs is a practical way for financial service organizations to supply members with faster, convenient access to funds, financial resources and payment vehicles. A number of banks and credit unions take advantage of APIs because of legacy or disparate systems that need help communicating with other systems. However, because of increased competition they also need to apply fintech in ways that encourage innovation while resolving consumer demands and industry challenges.
In addition, some observers expect the traditional description of openness to increase beyond the technological facet of integration and accessible APIs to become a valued holistic idea that embraces multiple partnerships and innovation.
With NXTsoft’s OmniConnect solution, a financial institution can seamlessly connect and integrate any FinTech with any financial institution. We have over 25 years’ experience and thousands of established connections to link fintech solutions to banks and credit unions.