Technology has made its mark wherever you look. Unsurprisingly, it’s starting to threaten every industry out there, and everyone’s trying to look for ways to keep up. The banking systems just happen to be another victim of this revolution. Nowadays, wherever you turn your head, you will find a computer doing the job that a person once had to do physically. Technology is a blessing and a curse, depending on who you are.
At one point in time, banking systems worked at a human pace. It all depended on the people working the registers and in the background. Now, payments and transactions can be done no matter where you are at any point.
But let’s try and go a step further. Let’s try to make everyone’s lives easier by condensing all these activities into an easy-to-use and efficient application. That’s what we call Open Banking.
We were putting it in simple terms when we talked about it earlier. So, let’s look at what Open Source Banking really is. Open Source Banking is the practice of giving third-party financial applications to all kinds of financial data of banks and other financial groups, like customer transactions, with the help of application programming interfaces (APIs).
With this, accounts and data from various institutions will be able to be networked for usage by customers, financial organizations, and outside service suppliers. Open banking is rapidly emerging as a significant engine of innovation that has the potential to transform the financial sector. It has become so popular that the FinTech Open Source Foundation (FINOS) has claimed that banks should start using Open Source more just to stay competitive. But here’s the thing: even if Open Banking is gaining a lot of traction now, it is still new. So, it will take a while before we see it being implemented properly.
With the help of Open Banking, it is easier to find solutions and services catered to each person’s requirements. One of the biggest reasons for this is that APIs can be found everywhere, and there are a lot more that are entering the market every day. This variety of services helps automate everyday transactions, reducing the time spent on them. The best part? It is all accessible as long as you have a way to get to a computer. Banks can start using Open Source to improve client satisfaction and loyalty by assisting clients with their money and by providing individualized financial goods and services.
Using Open Source Banking, banks will be able to centralize all the services that a customer will need, allowing them to bring the services together. As a result, advising, loans, and transactions can be done with a greater degree of transparency and under one management. All of these services will be more personalized as financial organizations will have the chance to look at their customers’ financial status.
Networked accounts will also be able to help customers take a better look at their own finances. With this, they will be able to compile their financial transactions in one place, giving them a clearer view before going into debt. Let’s look at an example: an Open Source Banking app can be made for people looking to purchase a house. This app will go through the client’s financial status and automatically compute what the client can afford based on their situation. This will help provide a more accurate service to clients so they know what they are doing at all times.
We all know that traditional banking is slow and ineffective. Nowadays, efficiency and speed is key and the most important aspect of customer satisfaction. Simply put, those traditional banks are too slow, and they can’t keep up with technology. With Open Source Banking, customers will have unlimited access to different payment options that are faster and more reliable.
The main concept behind Open Source Banking is that it’s completely transparent. All of a customer’s data will be available for financial institutions to look at, and that comes with a lot of hesitancy. Not everyone’s a big fan of this, and that’s why banks aren’t switching over just yet.
With Open Source Banking, everything becomes digital. Customers lose out on the experiences they have with the providers. As a result, this will start to affect customer loyalty and satisfaction.
Since open-source software is designed to foster community growth, any improvements or upgrades will be made accessible by developers who are in favor of the project. If a community refuses to back an open-source program, it is at risk of being abandoned, which might harm your company.
Velmie is an up-and-coming IT firm that looks to provide end-to-end solutions and tools for all kinds of FinTech companies. Their vision is to provide a unique advantage through cutting-edge technology tailored to particular markets and sectors.
The company’s mission is to help financial institutions solve the most common problems associated with the use of open-source technology by providing a comprehensive and reliable banking software suite with 100% source code ownership. In order to achieve this Velmie provides the following
- Customizable iOS and Android banking apps
- Modern front-end technology
- Modular banking software with the source code
- SLA support
- In-house customizations
- API orchestration and partner ecosystem
This approach allows clients to enjoy the benefits of owning the software systems while staying safe when it comes to data security and support.
Open Source Banking is taking the financial industry by surprise, and it’s gaining a lot of popularity for all the right reasons. It’s faster and more accurate, but that doesn’t mean it’s perfect. It’s not exactly private and not the most secure option out there. But upcoming apps like Velmie are trying to solve that issue. So, do your research, weigh out the options, and pick a side!