Juno helps your business get paid on time

What is Open Banking?

by Raquel
| June 16, 2021
Reading time: 4 minutes
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Open Banking allows people and businesses to access better data on financial products and services by agreeing to share their financial data with third parties securely. A great use case is for payments.

Before the banking crisis in 2008, the big banks held lots of data on our spending, borrowing, and saving habits, yet they weren’t using it in ways that particularly benefited their customers. But now, thanks to Open Banking, third parties are able to use this data safely to offer transformative and customised solutions. These enable better control of finances for everyone, from small businesses to individual consumers. 

How does it work?

Open Banking links up seamlessly with most online banking systems, so if you’re already set up to use online banking, you don’t need to do anything else. A range of innovative solutions is right at your fingertips.

Open Banking apps and services aren’t a replacement for your bank – they simply connect to your selected accounts and provide you with a wider range of solutions which you can opt in to. 

The process is simple and works in a similar way across all third-party providers. Select your bank on the provider’s app. You will then be redirected to authorise the connection through your banking app securely. And that’s it!

Linking a bank to Juno through Open Banking.
Linking a bank account to Juno using Open Banking

Is Open Banking safe?

With Open Banking, you are in control of how your data is used and for how long, and third-party providers can only access your information if you give their website or app your consent.

‘Open’ does not mean ‘unsecure’. As Open Banking apps and services are based on online banking, you will still be protected by the security measures your bank guarantees. And, as many Open Banking providers implement enhanced password protection and encryption, you can rest assured that your data is being protected by the most advanced security technology.

Remember to always check that the service asking access to your financial information is regulated by checking the Open Banking index.

Who provides the service?

Open Banking is only accessible to users through authorised third parties. There are two types of service providers: account information service providers (AISPs) and payment initiations service providers (PISPs). 

AISPs display your data to help you keep track of your spending or plan your finances. This is what’s known as low impact, and is the most common type of Open Banking provider.

PISPs, on the other hand, initiate payments on your behalf, providing an exciting alternative to traditional payment systems. This is where Open Banking can really take off in the future and have a high impact on businesses and consumers.

PISPs present unprecedented benefits for consumers, from lower-cost transactions, increased security and transparency, and ultimately better financial well-being.

How does Open Banking benefit you?

Open Banking has been praised as one of the biggest overhauls of the banking system in recent times. That’s because it puts the consumer – not financial institutions – at the heart of banking, offering more choice, autonomy and transparency. Here are just a handful of the benefits for personal and business customers.

For you as a customer

ProblemHow Open Banking can help youExample apps
You’re always forgetting to pay people backMake instant payments without the need for a credit or debit cardJuno
You’re applying for a tenancy, mortgage or personal loan and are feeling overwhelmed by all the paperwork involvedUse a simplified platform which will streamline the process and complete automated credit and background checksGoodlord 
You’re struggling to keep track of your personal financesAsk an app how much you can afford to spend before you spend itCleo
You’re in debt and don’t know how you’re going to make the repayments Get a personalised repayment schedule, budgeting recommendations and digital debt adviceTully
You want to keep track of an elderly or vulnerable relative’s financesMonitor spending habits via an app which uses machine learning to predict future financial vulnerability and protect against fraud or scamsKalgera

For you as a business owner

ProblemHow Open Banking can help youExample apps/
You’re having cash flow issuesUse instant payment systems to make late payments a thing of the past and send automated payment remindersJuno for Business
You don’t have time to compare all the different options for a business loanUse a comparison app and switch to a different provider seamlesslyBud
You would like to work with a new client but want to assess their creditworthiness firstGet instant insights into their credit history Tink

What does the future hold for Open Banking?

Platforms like Juno leverage Open Banking to make payments simpler, faster, more secure and less prone to error.

All transactions are instantly paid from one bank account to another using secure technology, which securely initiates account-to-account payments and allows anyone to pay you in a couple of clicks. 

The request-led system means that you always know that the details for the account you are paying are correct. You can even see all your transactions in one place, see who owes you what and send automated payment reminders. 

Juno is free for personal users and comes at a much lower cost for businesses than wallet or card-based platforms. By cutting out the middleman, Juno passes on cost savings directly to you, giving you more time and money to do what you do best.

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