At some point in your life, open banking is implemented into your daily routine. The system is continually growing and turning into something that most people can’t live without. Even consumers that primarily write checks use open banking on a monthly basis. On the surface, open banking is the type of innovation that is celebrated by both consumers and businesses. After reading about the pros and cons below, go to journeytobillions for more information about financial excellence.

Pros

Open banking simplifies the entire process of handling money. It is a better way to conduct transactions, and will lead to fewer errors in the short and long-term. Sharing data to improve financial prowess isn’t new, but open banking takes it to an entirely new level. Once synced, you are guaranteed better service.

1. It’s A Better Choice

How many times have you been frustrated with wait times, bad service or mistakes with money? These are the problems that led to the creation of open banking. It is a solution to a problem that consumers have been concerned about for years. 

2. Customizable Product Offerings

Open banking can be customized to your specific tastes. The API is flexible, and is only limited by your specific bank. Although the implementation may differ from one bank to another, consumers will not notice the moving parts behind the scenes. On the surface, it is a single running well oiled machine. 

3. Extends Core Services

Smaller banks and credit unions can now compete with the services offered by the bigger banks. In a way, it levels the playing field and allows the customer more banking options. It isn’t uncommon to have a checking account with one bank and a savings account with another. 

Cons

The world is still reeling from social media data issues and corruption. If you tend to wait a few years for technology to work out the kinks, then open banking may look like a huge hole. With the amount of data that passes back and forth, there are bound to be cautionary tales. Just like traditional banking, handling money in any way comes with its personal set of flaws.

1. Security

Open banking is secure, and follows the latest protocols. But if there is a breach, then a lot of encrypted information becomes accessible. The entire point of open banking is data sharing, so its strongest point can instantly become an Achilles heel. 

2. The Technology Is Still Growing

The open banking API will go through a lot of changes over the next few years. Local and state laws may even force a change that institutions are not ready for. Because of this, there will be growing pains here and there. 

3. Some Banks Are Slow

Banks that take on the benefits of open banking may not be using it to its fullest potential. It’s up to the consumer to look at the features and services provided by the bank. Even with good research, you may still get connected to a bank that is behind the times. 

Wrap Up

Open banking is here to stay, and will continue to develop even if you don’t use it. Data is an important part of a growing economy. To keep things consistent, weigh the pros and cons of open banking before implementing it into your lifestyle.

Susan Paige