Technology has been changing the world since before Steve Jobs and Bill Gates came out of their garages and into Silicon Valley. Every industry has been touched and transformed by the globalization and democratization that technology brings—and the FinTech revolution is quietly disrupting the financial sector as we know it right now. One of the key facets of this is the rapid growth of open banking.
Open banking has transformed the way people—and business leaders—manage their money. The shift is reshaping what financial roles mean in businesses, especially for Chief Financial Officers. As part of the broader technology disruption toward modern web services infrastructure like AWS cloud, open-source tools and frameworks, the mobile experience, and of course APIs, this next wave of fintech gives all stakeholders the chance to learn more about what the data represents. To stay ahead of the competition and the modern pace of change, c-suite execs need real-time financial data so they can make impactful decisions based on current conditions, not stale information or “gut instinct,” which is exactly what open banking provides.
Real-Time Cash Flow Knowledge Improves Planning
The current banking system places various roadblocks in making informed spending decisions, such as data coming from multiple sources, arriving in various formats that don’t easily translate to one another, and data errors from manual entry that can put an entire business at risk. Cash flow data must be accurate and resilient, meaning it provides leadership with information about trends and context to help them change their businesses’ course of action if necessary.
Challenges always lead to opportunity, which is where open banking comes in. Open banking provides more accurate, transparent information that improves the efficiency of financial analysis and planning to make life easier on CFOs and other financial leaders. By using the latest fintech advancements to link together multiple banking partners and deliver aggregated and normalized data, firms can gain visibility into their financial data and adapt a larger measure of control over this information.
Fintech innovators like Trovata empower leaders to leverage APIs that provide banking data from multiple bank partners so their firms can provide more holistic data to decision makers across their organization. It’s a complete solution that connects to bank APIs, through their data platform, and then to applications that provide automated delivery of information through the UI for every department in your organization. Open banking platforms provide C-suite leaders with the industry’s first cloud-based forecasting tool that brings unparalleled visibility into financial data.
Spreading the Wealth
To lead innovation, executives must understand the various ways that open banking can benefit them. Thinking outside the box is what has always set great leaders apart and when analyzing the benefits of open banking, the often-overlooked advantages abound:
- Cross-functional planning. From open offices to open-door policies, siloes are on the way out in the business world. When it comes to using technology and data, this same philosophy should be shared. Focusing on profitability via customer information, CFOs can share a variety of insights to drive the strategy for sales, marketing, procurement, and more. More data and more analysis lead to better actions, no matter the department.
- Customer needs. The world is speeding up and data is the new oil—businesses must adapt to these new needs and priorities and the recent pandemic has only accelerated the need for speed and agility. A recent study found that consumers have more than five bank accounts on average. Having access to all of these accounts in one place is a determining factor for most consumers. The rise of digital wallets like Venmo and PayPal has clearly shown the impact of the openness and transparency that everyone is looking for. Allowing users to access any bank accounts through their services, Venmo, owned by PayPal, reported 60% year-over-year growth in 2020. Square grew even faster. It’s Cash App, which allows its customers to buy bitcoin, allowed it to grow more than three-fold in Q1-2021 over the prior year.
- Reduce security risks. Security has never been more difficult—with the rise of remote working and mobility of access—but it’s also never been more important. The cost of data breaches can reach as high as $3.9 million, and financial data is a popular target. Small-to-midsize firms are reportedly victims of 43% of all cyberattacks, yet 66% of senior decision-makers at small businesses still believe they’re unlikely to be targets of online criminals.
By using the latest fintech advancements like open banking, firms can link together multiple banking partners and deliver coordinated data to customers, gaining visibility into their financial data and adapt a larger measure of control over this information.
The Future is Tech-Enabled Speed, Agility, and Transparency
Leaders get to the boardroom by delivering results. With open banking, the results speak for themselves. With better cash visibility and offering rich multi-bank data in real-time, CFOs get quick visibility to the analysis they need to focus on strategic decisions across the organization. The old ways of processing and presenting information fall short of the potential for data analysis, cash visibility, and the rich user experience that open banking can offer.
Business leaders and entrepreneurs hoping to capitalize on open banking should search for ways to expand open data sharing and ramp up their understanding of open banking’s impacts for their businesses. With open banking, C-suite executives have tools they can leverage to meet consumer demand for seamless financial experiences. The open banking disruption is already happening, and to participate leaders need technology partners that can drive innovation, offer transparency, and allow them to bring new products to market.
Written by Brett Turner, Founder and CEO at Trovata.
Track Latest News Live on CEOWORLD magazine and get news updates from the United States and around the world. The views expressed are those of the author and are not necessarily those of the CEOWORLD magazine. Follow CEOWORLD magazine on Twitter and Facebook. For media queries, please contact: firstname.lastname@example.org