Open Banking and its Benefits for Customers
In January 2018, the Revised Payment Services Directive (PSD2), which regulates the operation of payment service providers in the EU, came into effect. By the beginning of 2020, all payment institutions were obliged to follow a set of market and business conduct rules and requirements in order to successfully operate within the EU. These include risk management, due diligence, security administration, rights and obligations of all parties, possible fees, and commissions, and much more.
Among these requirements, adopted for the sake of promoting mobile and online payments, access to accounting information and growth of new financial platforms, there is also the Open Banking initiative. Essentially, it requires financial institutions to provide an API to third-party applications, providing them access to user transactions and financial data, all for the sake of building applications and services that would improve everyday financial activities.
OpenX is Way More
In alignment with the Open Banking initiative, Satchel has rolled out the OpenX, an Open Banking-compatible API for third-party services with a functional set far beyond the required, which will transform the use of electronic money for Satchel users.
Customers can connect financial planning and personal bookkeeping apps to have more control over their finances and to precisely track their expenses. They are able to use innovative apps with multiple Satchel accounts to have ultimate control over their spending categorization, family budget, and even business expenses.
OpenX API allows for the set up of additional security measures. For example, a user can implement a requirement for an extra action or an additional bit of information to protect larger transfers. Having a proactive API also allows connected applications or services to send money from a Satchel account, without compromising the financial security and without the need to perform any manual tasks.
Open Banking in Action
In the last two years, a wide variety of services have grown out of the Open Banking API, and they are all compatible with the Satchel’s OpenX:
- Personal or family finances management apps. Although they have already been mentioned above, they are worth an extra mention as they are a powerful tool that gives the possibility to avoid tons of spreadsheets or copying transaction data manually from the banking app to a financial planner.
- Insurance and loans. Direct access to transaction overview allows insurance and credit bureaus to have a better representation of their customers’ financial situation and provide tighter risk management schemes. This potentially allows to lower the fees for the customer, while maintaining less financial risks for the company.
- Simplification of payments. There are AI-enabled apps with text pattern recognition that allow fulfilling transaction metadata and sending transfers based on a provided image in a matter of seconds. Imagine an app that reads a cheque from a photo made with your phone camera, converts it into an electronic check and cashes it to your banking account in a second. Or an app that pays your utility bills in the same way. Thanks to Open Banking and OpenX API, these are already out there and working.
- Single payment solution for all your needs. Having multiple accounts in multiple currencies and even countries connected into a single payment point allows every invoice to be paid with the best suitable account, in one click. An app will check for conversion rates, calculate your commissions, and while keeping in mind your current balances on all accounts, execute a payment from an account that will be less costly for you.
These are the examples that have been built within the last two years, and there is much more coming.
A Future-Proof Solution
OpenX has an extended number of applications compared to a standard Open Banking API, which makes it much more flexible. When the Payment Service Directive gets revised once again, OpenX will be ready to comply, and the developers will be able to build better apps working with Satchel, whereas other providers will only be starting to implement the new requirements.
For the developers, OpenX is a time-proven and secure RESTful web API that allows rapid development and seamless migration to new versions. Satchel provides a 100% uptime service that will ensure stable and reliable operation of your financial services.