Open banking is a relatively new form of financial management which is started to become implemented around the world. The term refers to third-party applications that are designed to access people’s bank account information (with permission, of course) to help them manage their money.
For example, you would download an open banking app, connect it to your bank account, and it will be able to help you stay in control, like a Google Assistant that helps you with your day, but with your bank account.
While this may sound dangerous, it’s not, and there are plenty of benefits that come with open banking. If you’re not sure, there are five of the biggest benefits you’ll find.
#1 – Easier Budget Tracking
Easily the biggest benefit of open banking is the ability for you to manage your finances better. In essence, you won’t even need to because you’ll have a computer system to do it for you. This is a great way to track where your money is going and how you’re spending it.
This, of course, will help you identify where you can save money and cut back on spending to help you become more financially secure.
#2 – Loyalty Options
Many open banking platforms are starting to link up with other businesses and industries to provide benefits and discounts to their services. This is, of course, one way to boost the range of their product, but it does mean you get to save money and enjoy yourself the more and more you use the service!
#3 – Improved Credit Options
When it comes to applying for credit, the rating you get is pretty much based on your credit rating. This is determined based on what the bank sees, including your income and your outgoings, but the problem is that this can be extremely expensive, especially if you’re younger.
Instead, open banking platforms allow you to pass this information onto third-party providers (as long as you give them permission), and they’ll be able to see the same information. This way, they can make up their own mind and could give you a much better deal; saving you money in the long-term.
#4 – Everything in One Place
The majority of open banking apps will be able to monitor and track all your finances from multiple accounts and even from different bank accounts. This means you won’t have to worry about trying to keep tabs on everything all the time, you can simply monitor everything from one place.
#5 – More Control
Think about how much control you currently have over your finances. You might have a banking app where you can check your balance and make payments, but can you set up a direct debit that sends the remaining $0.43 to your savings account when you spend $4.57?
This might not seem like a lot, but this is just one of the features you can use via open banking platforms to help you save money and discover financial freedom.
As you can see, there are plenty of benefits to choose from when it comes to using the new open banking platform. Be sure to research what options are open to you to see whether this is a service you’re interested in!