To many people, the idea of sharing financial data is the last thing that they want. The security of their finances is something that’s expected when using financial technology and sharing feels contradictory to some fundamental aspect of that.
Much of the time, though, this data sharing might be used to customize the user experience for the customer – while also giving that customer a more thorough understanding of their own financial information. For businesses, the advantages are clearer, which might lead them to pursue technologies playing a greater role in this field, as they can help inform the future of their decisions.
Open Banking APIs
It’s difficult to talk about the modern data-sharing landscape without bringing up the change brought by an open banking api platform. As with a lot of digital technology geared towards finances, the aim is to make the spending process smoother and more efficient for both spender and business while also giving those parties more information relating to the transaction.
For businesses, this means that they’re then going to be able to be more directly involved in the process, understanding how this one transaction relates to their wider business model among the sea of other transactions that they can also analyze. For customers, it means that, as with online banking, they’ll be given a way of observing their own spending habits.
Small-Scale Data Sharing
When you think of financial data sharing, it’s natural for your mind to go to the kind done on an industrial scale – businesses exchanging data like it’s common currency. What you might not think about are examples like joint savings accounts that can give you and your co-saver control and insight into your savings and what kind of interest you can expect to get. This helps you to monitor your savings, but it also means that you can effectively plan ahead – how much money are you going to put in each month? What kind of interest can you begin to expect after a certain amount of time?
These kinds of questions are essential in helping people choose which kind of savings account that they opt for in the first place, so transparency is essential.
Security and Encryption
That initial reaction, however, is an understandable one – and institutions need to do all that they can to reassure customers and clients that their financial data is safe. In that case, it’s not just enough for technology around data sharing itself to improve. The security and encryption that is deployed with these systems need to match that versatility; otherwise, the risk is that sensitive information could be exposed to malicious threats. It’s not just the customers who this would impact either; trust would be massively affected in every business behind the process, risking their profits and brand reputation. If you’re still unsure about the security of modern financial systems compared to what you’re used to, some research can begin to have you appreciating the kind of security that you’re dealing with.
