STORY INLINE POST
For the last two decades, one concept has been reshaping the future of the finance industry around the world: data-sharing. Its significance responds to the number of services and products that can be developed when data transit is done optimally, responsibly and with the necessary tools to ensure customer confidence.
But not long ago, this concept generated concern and uncertainty because it used to be related to the misuse of information; data-sharing was often perceived as the key to a breach of customer and business security. However, this is an erroneous perception, which responded to bad experiences generated by the absence of a protocol that would protect those who participated in these processes.
Currently, a priority in the financial sector is the security of all users. From the trust that is consolidated with each client, thousands of more opportunities are born and will continue growing.
Data-Sharing and Open Banking
Data-sharing is a characteristic of open banking. This type of information exchange, which can be reduced to a circulation of information between financial and non-financial institutions (it depends on each country's regulation), is the key to improving the services and products offered to all people.
For open banking, data transit is what the circulatory system is to living beings. Thanks to this flow, the human body, and that of many other living beings, is provided with the essential and nutritious elements that make life possible. The information that travels through the body thus becomes the key to understanding the functioning of each of its parts and its arrival, from one point to another, means that everything can continue in perfect condition. If we think about the exchange of data from this analogy, we will understand that this simple equation will play an extremely important role in the finances of the future. This practice is a map toward new technological frontiers.
Open banking is a proven model around the world that, with its recent arrival in Latin America, has shown its potential to reform the financial ecosystem through technological tools that explore the possibilities of data-sharing for the benefit of companies and end users.
This flow of data between financial and non-financial entities that occurs in open banking allows the generation of profiled products and services, that is, adapted to the needs of customers and users, which represents an important advance in terms of financial inclusion.
Data Exchange for Financial Inclusion
Although commonly, the data exchange practice has been related to situations that generated uncertainty, the advancement of technology has consolidated a highly efficient and secure model that offers users the opportunity to integrate into the financial world, unlike years ago, when the issue of financial inclusion was conditioned by severe and almost punitive credit histories that left many people unable to take advantage of these activities.
Today, the reality created by open banking and data-sharing has made it possible to make great strides in this area. People who for a long time were excluded from participating in the financial environment are now summoned to participate in obtaining financial services and products that perfectly meet their needs, as well as the possibilities they have to solve problems related to their finances. It is an issue that, once again, shows confidence as an emblem.
Data Exchange: An Agreement in Which Everyone Participates
In the open banking ecosystem, users are in control of their data. As a detail that complements the high security standards, it is the users who always have control of their data and decide with which entity to share it. In this way, speaking of data exchange between different entities does not mean that shared information is available to any person or company. Control is always on the users’ side; they are the ones who participate in a process that, with the help of open banking, has forever changed the way of understanding finances.
Without a doubt, strategic alliances are important for the exchange of data to be achieved. We have seen growth in the fintech sector in Latin America thanks to large unions between traditional and non-traditional banking institutions, credit bureaus, tax information institutions, etc., all with the purpose of having more data to share
With all of the above, it is clear that the exchange of data is an issue that all people and companies must address as soon as possible. It impacts the realities of financial inclusion and improvement of services and will lead to the faster availability of products. The pursuit of better living conditions is dependent on different factors and open banking can have a global impact. Therefore, the participation of each one of us is essential to achieving the goal of a better financial future, today.