What is Open Banking?
Open banking is also known as “Open bank data”. It is a banking practice that provides third-party financial service providers open access to consumer banking transaction, and other financial data from banks and non-bank financial institutions through the use of application programming interfaces (APIs) (Open APIs). In other words, Open banking is a financial services term as part of financial technology that refers to: The use of open APIs that enable third-party developers to build applications and services around the financial institutions (FinTech products).
NB: The term Open API is also called Public API and it simply refers to an API (application programming interface) made publicly available to software developers and can be shared freely with universal access.
Open banking was conceived for the ultimate purpose of improving financial services for customers. And by opening up access to data they’ve historically kept in-house, it allows new companies and new products to come to market, and use this data in helpful, innovative ways.
Benefits of Open banking
For financial service providers – Open banking will allow financial service providers to significantly innovate on their product offerings to businesses.
For businesses (large and small) – Innovations made by financial service providers will mean more effective and efficient financial tools in business – notably payments. Which will mean things like more automations, freeing up more time, doing away with the headaches of manual tasks, and ultimately saving you money.
For customers – Open banking will mean better ways to spend, borrow, and invest.
Examples of FinTechs (financial technology companies) or companies using open banking include: Flutterwave, Kuda, Paystack etc.
What is Open financing?
Through the use of integrative protocols, banks can provide fintech companies with secure access to financial data. In turn, both parties can collaborate to bring new products and services to consumers. The result of this cooperative relationship is known as open finance. In other words, Open finance is the result of the cooperative relationship between banks and fintech companies.
Open finance sets the standard for how banks and other financial institutions share data. Its purpose is to increase banking possibilities and streaming the entire process by sharing user history (data)
What is Zoho Books? And how does it give an advantage?
Zoho Books is an online accounting software that manages your finances and expenses, automates business workflows, and helps you work collectively across departments.
Zoho Books can serve as an intermediary/connection and can play the role of Open banking by integrating/using Open APIs in its system and at the same time it can play the role of Open finance by giving out its own API and users account information stored in its system.
Open banking deals with using open APIs that allows 3rd party developers/consumers/businesses to create products or for their use. Here, Zoho Books can easily integrate and consume other APIs. While; Open finance deals with giving out data/providing data to users and describes the cooperative relationship between Fintech companies and banks. Here Zoho books can also export its own API which would contain its users relevant financial account data and can be used by a fintech company or 3rd party developer.
To Learn More and Sign up for a Trial Version for Zoho Books click here or this Link: https://bit.ly/3qDMmpF