Banking is changing at a rapid pace and lately a new term called “open banking” or “open finance.” Let us break it down and understand what the term means.

Open banking is a big switch in the banking world. It is all about sharing information and working together. Banks are now teaming up with other companies including fintech to give better services. They are being open about what they do, how they do it and what new products are being offered.

It is estimated that over 132 million people will be using open banking services globally and this is a big figure. The trend is making banks work harder. Banks are competing with each other and simultaneously trying to give us the best deals and services. They are buddying up with those fintech companies.

However, with all the sharing and teamwork, there are challenges. One big challenge is handling the data. Banks as well as the partnered companies need to find out how to share information safely and smoothly.

This is where technology comes in. The so-called APIs help the systems talk to each other. Banks and companies use these to share information securely. It is like having a secret code that only the right people can understand.

Natwest bank has been using the tech to their advantage. They are giving their customers better insights into their money and simultaneously keep the information safe. However, it is not just about sharing data, but it is also about making it available quickly and efficiently. Hence, cloud computing comes in. The cloud system can handle transactions seamless even when lots of people are using the service at once.

The system is simultaneously making sure everything is safe and secure. Banks ensure that the customer information is protected following all the privacy rules. They use encryption techniques to keep the data safe from prying eyes.