Open Banking is the “future of banking,” according to an update from alternative investment platform YieldStreet.
The team at YieldStreet has explained how Open Banking can impact your banking experience. In an episode of The Yield, Yieldstreet CFA Peter Kerr was joined by Frédérick Lavoie for a talk on how data and technology are enhancing the consumer experience for bankers.
Frédérick is the Chief Operations Officer at Flinks, which he co-founded back in December 2016. Before Flinks, he spent a number of years working in online personal lending. Using the latest data tech, he “brought to market competitive consumer financing offers that undercut payday lenders with lower interest rates.”
Flinks enables businesses to connect users’ bank accounts, “enrich their data, and utilize it to deliver better products.”
As explained during the discussion:
“Open banking is an environment where consumers can consent to simply sharing their bank data to access the services of a company like Flinks.”
For instance, if you want to move funds to your family in Europe, you may download the Wise app, one of the leading fintechs and in there, “thanks to Flinks, select your bank and move your money to your recipient faster and cheaper than you would have with your bank.”
According to the update from YieldStreet, this open banking experience “removes the friction that tends to hold money up for days at a time, removes service fees and increases access across the board, resulting in both enriched data and simplified loan application experience, making the process smoother and quicker for consumers.”
The update also mentioned that the future of Fintech “isn’t only found on the credit side.”
Buy now, pay later systems, and Credit Karma are “strong players on the credit side, but there is plenty of innovation to be found on the asset management side as well.”
With insights into some of the biggest trends, Frédérick talked about compliance and future use cases that Flinks aims to provide in the foreseeable future. And behind each of these use cases is “the same common goal – to create a frictionless user experience.”
As noted in the update:
“It is clear that digital payments and digital banking are here to stay. There are several trends that people need to start taking more seriously, starting with the digital lending experience. It’s only a matter of time before gig entities are able to offer loans to their employees, and more challengers are integrating the complete experience into their products.”
As mentioned in a blog post published by YieldStreet, lending proliferation is also “trending, and according to Frédérick, the buy now, pay later option ultimately offers some potentially attractive benefits to both consumers and lenders, especially in comparison to the options offered with credit cards.”
More options typically “bring better outcomes, and each of these trends aim to bring more options to consumers, including the underbanked.”
The update also mentioned:
“The goal to truly protect the best interest of the consumer can’t only be solved with technology. It also needs to be solved with regulation. We are on the verge of this regulatory framework becoming visible, if not yet enforced, bringing with it the biggest challenges and opportunities yet. Frédérick is confident that the lack of open banking limitations will only benefit consumers.”
