21 Apr 2022 By PAYCEC
The traditional banking model is under threat as a result of the increasing use of "Open Banking" and the emergence of digital banks and fintech companies. Here are some differences between Open Banking and Traditional banking:
For today's consumers, digital banking is critical.
Consumers can access banking service 24/7
Focusing on in-person customer service and a system of branches and headquarter.
Accessibility may be lacking with banks that do not have online banking capabilities
|Open Banking helps customers connect with other banks within the system easily.
|Customers may pay higher transaction fees or be unable to withdraw cash when there is no ATM of their bank when traveling.
|Banking consumers benefit from instant payment when shopping in-store and online
|No real-time payment.
|Banking services can connect with other digital payment methods like e-wallets: Paypal, Apple pay, Google pay, etc.
|Cannot share data with third parties.
|Open Banking operates based on an open API architecture that integrates best-of-breed business functions.
|Traditional banking software was created as a self-contained set of pre-integrated business processes. API interoperability was not possible with these functions.
|With the rise of digital banks and fintech firms, the market has seen plenty of new competitors offering more agile digital products, innovative user experiences, data-driven insights and tailored products and services.
|Competition is only for banks and financial institutions.
|The adoption of Open Banking creates revenue-sharing ecosystems, customers and merchants will benefit from subscriptions and referral services.
|There is no recurring payment applied.
|Arousing the risk of data violation.
|More security and data protection.
|There are more big tech companies that embark on the market like Google, Amazon and Apple as well as Fintech firms.
|Only banks and financial companies participate in the game.
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