Open Banking is seen as a financial revolution that empowers consumers by securely sharing data between banks, institutions, and third parties. It streamlines transactions, eliminates manual document presentation, and reduces compliance time.
Since its introduction in the UK in 2018, Open Banking has been globally adopted, although it is not a new concept. South Africa has been observing these trends to best gauge the next steps- learning what happens beyond the first implementation.
Shanaaz Trethewey- Chief operating office for Comcorp South Africa, a software innovator and specialist in authentication technology solutions. “As a country, South Africa has laws of a global standard, and our financial institutions have very stringent compliance requirements with our verification processes being of a world-class standard. As we embed automated ways to comply with these requirements – we are most enabled to receive authentic supporting documents with permission-based sharing models – mimicking elements of open banking principles. We can see evidence of this around us – whether it’s in the form of permission consumers provide for credit checks or in the form of payment platforms whilst shopping online. As a business – and consumer community – we need to really think broader to extend these emerging trends to maximize how we transact,” she says.
Open Banking goes beyond permission-based data sharing by emphasizing individual ownership of data and centralizing exchanges through a secure platform across industries and service providers. Its main objective is to empower consumers, promote financial control, and foster a competitive and transparent market. Non-financial businesses are also adopting digital channels for verification.
It has the potential to transform personal money management, enable customized products, and facilitate seamless business operations. In a strained economy with higher interest rates and inflation, lenders require vigilant risk assessments, including income verification.
South Africa has the necessary guidelines, knowledge, and technology already in place to embrace Open Banking. All that remains is for communities to come together to promote transparency and improve frictionless business processes and provide consumers with more choices. Its growth will likely drive further innovation, ultimately benefiting consumers in the financial sector.