Open banking is a powerful tool for third-party financial institutions. And it’s not restricted to the B2C world of payments where usage is perhaps more well known - it is a great way for merchants to simplify the whole experience and keep business flowing brilliantly. Kriya Payment's Head of Risk, Nikhil Shah, goes on to explain why and how in this blog post.
All that sounds great, but it can seem daunting to give access to sensitive data and some users are understandably hesitant. At Kriya we use open banking to help our customers access credit and support their business even more seamlessly. Nothing is more scary than the unknown, so we thought we’d break down open banking to keep in tune with our transparency promise.
What is open banking?
Open banking was created to allow third party financial institutions, such as Kriya, to better personalise financial services available to customers. It’s secure, quick, convenient – and more than 6 million businesses and consumers in the UK already use it. Apps and services are regulated by the Financial Conduct Authority, which oversees UK financial services firms and markets, or a European equivalent. This means companies have to follow strict rules and stringent standards to keep your data secure.
Connecting to open banking can be intimidating, but there is no need to worry.
Couple of things to keep in mind about open banking:
- It gives a read-only view of a bank account. It doesn’t give us full access.
- It’s protected by encryption according to the secure open banking standard.
- Users can opt out at any time.
Connecting to open banking with Kriya
We can check to see if our customers are eligible for higher limits
We will use the information to make an assessment to see whether customers are eligible for a higher credit limit than they currently have.
We will only see transaction data, nothing else
Our open banking solution only gives us a view of transaction history. All we can see are debit and credit transactions, and the account balance.
We will not be able to access accounts
Open banking doesn’t give us access to bank accounts, nor does it allow us to perform any other actions within the account including sending funds, applying for products, and managing accounts. It doesn’t allow us to take money from bank accounts either.
Users are in control
We only have access to the data users give us access to. Our open banking solution allows customers to withdraw consent at any time so they are fully in control and can opt-out at any point after connecting. We would recommend maintaining consent so that we can continue to best serve our customers needs, but it’s of course up to them.
It helps combat online fraud
Our open banking solution provides an extra layer of security and acts as an additional measure to ensure that our customers are exactly who they say they are. This provides a useful tool to combat online fraud and impersonation attempts against our customers.
Not so scary now, is it! And remember, if you have any questions about open banking or are curious how you can use it to provide credit to your customers, our team is here to help!