How Open is Open Banking ?

Ankit Raj
3 min readOct 14, 2019

Open Banking is one of the hottest hot sales in the fintech ecosystem in the last few years. If you visit any fintech conference/meetup, the most common buzzword you hear is “Open Banking”. It all started in Europe and then picked up the whole world like fire.

Openness to world (Pic credit:

What is Open banking ?

It’s a practice through which third-party financial service providers have access to consumer banking, transaction, and other financial data from banks and other financial institutions through a data-sharing model called API.

Why we need Open Banking ?

Banks are running on the almost decade-old infrastructure. There is a need for up-gradation and innovation. The biggest challenge is that it can’t be upgraded like a normal SAAS product. The reason is a numerous amount of dependencies in terms of regulations and tech.

Oh! Dear!! I got Open banking. Tell me what’s the benefit of it!!

Let’s discuss the benefits in terms of Send, Spend and Lend.

  1. Send | Spend: Whether you are buying a house, car or other luxury items. Most of the time you will prefer to take it on loan. Without getting proper insights about finance health people to buy it. The result is a decade long debt. everybody wants to live a debt-free life and retire before a certain age. The unnecessary loans can mess up your whole plan. Sharing the data and getting insights can be helpful in this.
  2. Lend: You want to take a loan. If your all account is connected in one place, it is easy to get a loan with better credit terms (If you have good record!!) irrespective of the country you are living and bank you are using. Imagine you shifted to a developed country (Singapore) from a developing country(India). Getting a loan is very difficult, only because of a lack of data. Transparently getting concrete records can solve this problem!!
  3. Lend: There are lots of private companies and microfinance firms which provide the loan. Lack of availability of data leads to fraud in many ways. The loan provider needs to have clear and transparent insights before giving a loan. Giving access to the data points to these providers will help in smoothing the whole process.

Connecting different account in one place can tell lot about finance health of individual as well as for company.

Ok! So by doing this will bank be in danger ?

Singapore banks in one place (Pic credit: Unsplash)

Above pic says thousands words. Singapore stands 9th in terms of trade balance in whole world. All the banks are lined in above pic.

Banks are like sacred place for finance. It provides the promise and safeguard to your hard earned money.

Open banking will put pressure to large, established banks to provide more and more better service. After all, competition will get healthier among banks. This will results in better regulations, terms & conditions, better technology and better service for user’s.

I will write more in next article, if I get good response!!


Ankit Raj

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Ankit Raj

Blockchain Engineer | Distributed system | Ex- Red Hat | Ethereum foundation grantee