financialtreat – will explain about the Open Banking System to Increase Customer Value which you will get in the following article. let’s look at this article carefully!
The development of a banking platform in Indonesia is carried out within the framework of a dual-banking system or a dual banking platform within the framework of the Indonesian Banking Architecture (Barah), to present an increasingly complete alternative to banking services to the people of Indonesia. Therefore, the open banking system makes an alternative for the community to provide for their needs.
Together, the banking platform and conventional banking synergistically help mobilize public funds more broadly to increase financing capacity for sectors of the national economy. The existence of an open banking system will make it easier for the community to support the economy.
Open Banking to Increase Customer Value
The characteristics of a sharia banking platform that operates. Based on the principle of profit sharing provide additional banking platforms that are mutually beneficial for the people. And banks, and also highlight aspects of fairness in transactions. Ethical investments, emphasize the values of togetherness. And brotherhood in production, and avoid speculative activities in the industry. In financial transactions.
By providing a variety of banking products and services with more varied financial schemes. Islamic banking is an alternative to a credible banking platform that can be. Enjoyed by all classes of the Indonesian population without exception.
In the context of macroeconomic management. The widespread use of various Islamic financial products and instruments will be able to strengthen. The interaction between the financial sector. And the real sector and also create harmonization between the two sectors.
The more widespread use of sharia products and instruments. Besides supporting people’s financial and business activities. Will also reduce speculative transactions, thereby supporting total financial platform stability. Which in turn will provide a vital additional contribution to achieving price stability in the medium to long term. .
With the enactment of Law No. 21 of 2008 concerning Islamic Banking which was issued on July 16, 2008. The development of the national Islamic banking industry is increasingly having. An adequate legal basis and will encourage even faster growth.
With the impressive development progress. Which has reached an average asset development of more than 65 percent per year in the last five years. It is hoped that the role of the Islamic banking industry in supporting. The national economy will be increasingly important.
In order to provide additional guidance for sharia banking stakeholders. And put the position and perspective of Bank Indonesia in developing sharia banking in Indonesia. Bank Indonesia has finally issued. A Blueprint for the Development of Sharia Banking in Indonesia”.
In its preparation, various aspects have been considered comprehensively. Including the actual state of the national Islamic banking industry and its instruments. The international growth trend of the Islamic banking industry. And the growth of the financial platform.
A national bank that is starting to take shape. And also inseparable from a more macro financial platform framework such as the Indonesian Banking Architecture (Barah). And the Indonesian Financial Platform Architecture (Aski). As well as international best practices formulated by international Islamic finance forums,
Open banking is a modern way in which third parties can disclose customer data. With the authorization of the banking customer. With this approach, financial organizations. And banks can work closely with retailers in tandem to better understand. And satisfy customers in depth. However, open banking still accompanies several weaknesses. That many customers consider in terms of security.
What is “Open Banking”?
The term can be defined in various ways such as Psd2 in Europe and Open Banking in the UK but in general, it refers to the ability of banking customers to authorize third parties to link their bank account data to collect account info or/and to initiate payments.
Some examples specific to this definition include efficient mortgage applications, fixed orders or weekly shopping, money management dashboards or financial tools, trigger event notifications, etc. Several markets, led by the EU and UK, have already taken a leading position.
By making and issuing their own open banking regulations. Other markets, such as Australia, Canada, New Zealand, Mexico, Argentina, Nigeria, Hong Kong (Sar), Japan and Taiwan (Jurisdiction), for example, are also moving in that direction.
pros and cons
“Open banking” creates new capabilities and designs applications to help customers live easier. By applying the concept of “Open banking”, financial forums and banks can improve their customer service and become customers with insight. Indeed, consumers prefer to use fast and smooth financial and payment services, planned payment instructions that help them save time, manage account balances, risk management, or even more promotions that are updated based on personal data.
“Open banking” sorts and analyzes data to gain better insight into customer activities and relationships, and helps financial companies understand more about their customers’ behavior patterns, financial health, plans and investment goals. Open banking will also allow payment companies to find specific areas of expertise and develop unique products and services.
On the other hand, this approach still faces several challenges. Because personal data is a mystery and third parties need to be authorized to link this news, policymakers and regulators have not yet fully developed standard guidelines and open-minded laws to facilitate the exchange of information.
In fact, the trend reveals a disparity in news exchange between financial forums and retail traders. When the flow of customer data transfer from a bank or financial company occurs easily, there are limits in the opposite direction. For example, banks cannot disclose retail customer data, and this not only creates news imbalances, but can also reduce the desire for discovery in the banking sector.
Build a banking ecosystem
Financial organizations are already starting to expand their ecosystem to better serve customers by connecting quickly and effectively to banking partners and third parties, and data and platforms will be key to enterprise agility.
The first step is consumer education. Financial service providers should present more of the benefits that their customers will get in terms of an “open banking” approach. After that, the provider can look at technical and operational capabilities to ensure all processes work in tandem. The next phase focuses on open data and security.
Finally, identify and source partners who can enable compliance and operational readiness as well as create new products, services and experiences. Bank Masyarakat Indonesia assesses that the New Normal era, which has emerge as the implications of the Covid-19 pandemic, has accelerated the implementation of open banking platforms in the financial industry.
“So this is an acceleration from what was originally a close banking system to an open banking system,” said Director of Digital and Technology Kabar (Ti) Bri, that for the financial industry such as banks now there is also an acceleration. The possibility of banks relying on each branch or branch-centric office is starting to become irrelevant, especially in urban areas.
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“With the current digital economy era, we are indee collaborating more broadly, getting more connecte with new friends in the digital realm such as fintech and e-commerce, which makes us enter the open banking era.
According to him, banks also began to experience a shift where banks could not assume that they could be present on the entire frontline, sometimes banks also focuse on their financial services when for other product aspects they could collaborate with friends.
“Therefore, when accessing savings can be done anywhere, such as in e-commerce or online transportation services. This is what we are doing. Where in the digital era it is increasingly connecte and open to anyone and hopefully can be. A solution in the low-touch economy like today.
that mobile and online systems are now seen as the basis for an entirely new type of banking. Thus the change force bankers to accept. That physical branch offices were no longer a mainstay in the banking platform.
The open banking era will be centere entirely on smartphones. Or other online communication systems. Where banking service features such as account opening. Lending and financing, credit scoring analytics, payment networks, to fintech friends are include.
Well, those are some reviews that discuss the open banking system with this article. I hope this is useful and thank you.