Real Uses Cases of Open Banking

Open Banking is taking over the financial industry. Based on a framework for securely sharing financial data in real-time, Europe is also hooked, with the number of Open Banking users expected to reach 63.8 million in 2024 –– nearly 50% of global users. This is setting a new pace that financial institutions and fintechs need to keep up with.

Both businesses and users around the world are already benefiting from the efficiency and convenience of financial processes that Open Banking creates. It’s reshaping daily banking services, improving credit management, streamlining compliance procedures, and automating accounting tasks.

With all these benefits –– and more –– up for grabs, let’s take a look at some real-world applications of how Open Banking is being used.

Enhanced daily banking services

Open Banking has created a foundation for businesses to develop ever more innovative tools and products, many of which are focused on making it easier to manage finances and giving more control over how financial data is used.

Personal finance management apps, such as Bankin, Linxo, and Sumeria (previously known as Lydia) give users personalized insights based on their income, spending, and saving habits. By pulling in data from different sources into one place, these apps give customers a complete view of their finances, so they can set budgets, track expenses, and get personal advice.

Before now, this level of control and convenience was unimaginable using traditional banking methods.

Another asset for customers is cashback and reward programs. Access to spending behavior lets businesses customize offers, incentives, and rewards around individual preferences. With more relevant and appealing rewards, new levels of user engagement and loyalty can be reached, increasing customer satisfaction and loyalty.

A closer look: Capital Koala

Capital Koala helps parents save money for their children’s future by rounding up purchases and investing the spare change. Through Powens’ banking aggregation and Paylead’s cashback program, they can now offer this service both online and offline. Integrating saving and rewarding methods means parents can build a financial cushion for their children with little effort.

“By combining Powens and Paylead’s expertise, we have been able to deploy our solution offline. Since bank data security is a highly sensitive issue, we rely on Powens’ know-how to guarantee our customers that their data will be protected and remain confidential.” – Jean-Yves Bernard, Co-founder, Capital Koala.

Credit management

With a secure way to plug into real-time customer data, credit management is being transformed. Today, real-time credit assessments and tailored lending solutions enable lenders to carry out more accurate risk evaluations and efficient credit processes.

Traditionally, credit assessment relied on time-consuming manual checks of old financial information and was prone to human error. Now lenders can leverage real-time banking data to get a more accurate and comprehensive evaluation of a borrower’s financial health and make instant credit decisions.

By harnessing real-time data like detailed transaction histories, spending patterns, and income stability, lenders can cut the risk of defaults and make more informed decisions. They can even create loan terms and interest rates personalized around users’ financial needs.

All of the above has paved the way for Buy Now Pay Later (BNPL), consumer and micro-credit, as well as leasing services to thrive.

A closer look: Joe

Joe uses Powens’ bank account aggregation technology to make real-time assessments of customers’ creditworthiness, providing fast and accurate credit decisions. This technology means Joe can offer split payment options without merchant intervention, improving the customer experience and expanding their market reach.

“Powens’ bank account aggregation technology is central to the way we operate. It enables us to provide essential features to users while limiting risks.” – Kevin Ohana, Co-founder and CEO, Joe.

Simplifying compliance and onboarding

Until recently, compliance and onboarding processes were often time-consuming and heavy on resources, requiring human verification of documents and considerable paperwork.

Now, compliance procedures and customer onboarding are much easier, thanks to automation methods in Open Banking. Using APIs, verifying customers’ identities, and conducting AML (Anti-Money-Laundering), KYC (Know Your Customer), and KYB (Know Your Business), checks are made instantly and with little effort. APIs securely access and verify customer information in real-time, offering a seamless customer experience while ensuring compliance with regulatory requirements.

This automation reduces the risk of errors and fraud, as well as the burden of human-performed administration, so customers can enjoy a quick and easy onboarding process that takes minutes rather than days or weeks.

A closer look: Docaposte

Docaposte uses Powens’ technology to streamline invoice payments with a two-click process, addressing compliance and onboarding efficiently. This approach accelerates the payment process and ensures that all regulatory requirements are met with no need for manual intervention.

“In addition to the high-performance technical solution, we have benefited from the responsiveness of the Powens teams. Technical integration was completed in a few months.” – Morgan Trévily, Head of Development Payment Solutions, Docaposte.

Accounting automation

Inputting data manually is time-consuming and runs the constant risk of human error, especially with accounting tasks like reconciliation, and financial reporting. Automating these processes guarantees accuracy and reduces the workloads of valuable human resources.

Reconciliation

Reconciliation processes that used to take hours or even days to complete manually are now done in a matter of minutes thanks to automated bank reconciliation via Open Banking. This frees up valuable time for finance teams to take on more strategic tasks. Plus, for new e-invoicing regulations in the EU region, including the French e-invoicing mandate, Open Banking provides the perfect solution to ensure compliance and efficiency.

Financial reporting

Automation for financial reporting lets businesses make data-backed decisions in real-time, as well as ensure any applicable regulatory compliance.

A closer look: Bpifrance

Bpifrance uses Powens’ technology to offer a cash flow management solution that makes it easier for businesses to manage their finances. As a result, company directors can make hyper-informed decisions using real-time insights and streamline financial processes.

“We selected Powens as their API technology was best suited to our needs and the most robust.” – Socheat Chhay, Head of Digital Transformation Open Banking Lead, Bpifrance.

Real-world applications of Powens’ solutions

Powens’ solutions help businesses across various industries to optimize processes and increase efficiency with comprehensive Open Banking applications. Our Bank product helps banks aggregate client data from various sources to provide personalized advice and financial planning services, enhancing customer satisfaction.

Banking aggregation technology allows lenders to approve loans faster. Access to real-time data makes it easier to assess creditworthiness precisely, reducing defaults and improving the lending experience.

Powens’ services automate payment processes, reducing payment processing time and improving cash flow. Businesses can initiate payments directly from their bank accounts, so there’s less chance of manual entry errors. This improves efficiency, payment speed, and financial stability.

Open Banking: Just the beginning

As businesses harness artificial intelligence to power new Open Banking capabilities, it’s exciting to think about what might be possible for Open Banking in the future. AI is already creating new ways to serve up hyper-personalized customer experiences, so don’t expect innovation in Open Banking to slow down either. We could see new capabilities with analyzing financial data, predicting spending, and detecting fraud –– and it might not be long until we’re even conversing with our financial data.

One certainty is that Powens will continue empowering financial institutions, fintechs, and software vendors across Europe & LATAM to create innovative products and streamline their financial operations. Our Open Banking Platform provides more than 280 leading financial institutions and 7 million end-users with comprehensive embedded, frictionless, and fully automated banking and payment experiences.