Open banking has played a huge role in triggering the fintech revolution of recent years. Fintech, or ‘financial technology’ companies have taken the UK by storm, gaining tens of millions of customers by making traditional financial companies look slow and inaccessible in comparison.
Open banking refers to a structure within the world of finance that allows licensed third parties companies access to a customer’s transaction data within a bank, or other financial institution, via an API. This means that these third party companies can offer innovative and creative new apps and solutions that ultimately benefit the consumer, by giving them more transparency, flexibility and control over their finances.
The UK has been a world leader in adopting open banking, which makes sense as Britain continues to be the world’s key innovator in finance. This has led to fintech startups from the UK, such as Revolut and Wise, becoming the world’s most successful, both in terms of customer numbers and valuation.
Open Banking has led to whole new categories of products becoming available, that were simply impossible before the new rules came into force.
For consumers, budgeting used to be a chore. Hours of logging into bank, credit card and investment websites, then getting the data into a spreadsheet or notepad, so the all-important budgeting calculations could be performed. Open banking has changed all that, as now a series of budgeting apps have launched. They use open banking to gather the customers transaction data from multiple banks etc, and then collate all the data together, so the user can see all of their spending in once place, and categorise it, see what they combined outgoings are, alongside many more features.
Some of the main budgeting apps available are:
Snoop (see a full Snoop app review here)
Automated Saving Apps:
Saving money can be hard, especially to start saving. Then, once you have some money saved, what is the best thing to do with it? Luckily, a series of apps have utilised open banking to help with these problems. These apps connect to your bank account and analyse your spending. They will then work out the amount you can easily afford to save on a regular basis, and if you wish, can even take the amount from your bank automatically and send it to their platform. Once they have the funds, they give a range of saving and investment options so you can grow your saved funds. Ideally this would allow users to be able to save without even noticing! The Moneybox app even rounds up each payment that you make to the nearest pound, then saves the difference. The closest possible thing to a digital piggy bank.
Some of the available automated saving apps using open banking are:
It is heartening to know, that even in times where finances can be tough for many people, there are solutions out there that can genuinely help out. And for that, we all have open banking to thank!