Future of Open Banking Platforms: What to Expect

Open banking platforms are reshaping the financial industry. By securely sharing data between banks and third-party apps, they allow consumers greater control over their finances and fuel industry innovation. But what lies ahead?

As technology advances and consumer demands grow, open banking platforms are set to broaden their features, creating new benefits for users and businesses. This article dives into the future of open banking, covering key trends, challenges, and the potential impact on finance.

Expanding Beyond Payments

Right now, most open banking platforms are focused on payments and account aggregation. They allow users to make direct bank-to-bank payments and access all their financial information in one place. But in the future, we can expect these platforms to go beyond payments and offer a broader range of services.

Open banking platforms are likely to integrate more advanced financial tools, such as:

• Personalised Financial Advice: Platforms will use real-time data to offer tailored budgeting and savings recommendations based on users’ spending habits.
• Automated Investing: Users will be able to link their accounts to robo-advisors that automatically invest money based on financial goals and risk tolerance.
• Lending Services: Instead of just facilitating payments, open banking platforms will help users access loans by providing detailed financial data to lenders for faster approvals and better loan offers.

Greater Focus on Security and Privacy

Security is already a top priority for open banking, but as these platforms grow, the need for even more robust security measures will increase. Future open banking platforms will likely adopt cutting-edge technologies to protect user data, including:

• AI-Powered Fraud Detection: Artificial intelligence will play a bigger role in monitoring transactions and identifying suspicious activity in real-time, helping to reduce fraud.
• Data Privacy Improvements: As more data is shared across platforms, privacy will become a major concern. Currently, there is already a lot of control with the users – they can opt-in or opt-out from data sharing anytime. Future open banking platforms will offer users even more control over how their data is used.

Broader Adoption Across Industries

Open banking is currently popular in finance and e-commerce, but as the technology develops, it’s likely to spread to more industries. 

In real estate, buyers could securely share their financial data with agents or mortgage lenders, simplifying the home-buying process. In healthcare, open banking might help patients manage medical bills and track health expenses through connected accounts. For travel, travellers could pay for bookings directly from their bank accounts, with features like currency conversion and budget management built into the platform. 

Secure data sharing will open up collaboration between banks and various non-financial sectors, expanding open banking’s potential applications.

Open Finance: Next Step

Open banking focuses on bank and payment data, but open finance – the next logical step from open banking – will aim to expand data sharing to include a user’s full financial profile—like investments, insurance, pensions, and savings. It’s already practised and regulated in Brazil. 

With open finance, users could gain a complete view of their financial landscape in one place, supporting more informed decisions. This expanded access could also improve product comparisons, helping users find better options, such as lower-cost insurance or high-yield investments. 

Additionally, open finance could make it easier to switch providers for services like insurance or mortgages by securely transferring user data. Open finance is the next step, paving the way for a more connected and user-centric financial ecosystem.

Regulatory Challenges and Compliance

As open banking platforms advance, they face growing regulatory hurdles. Governments are crafting rules to safeguard data privacy, security, and competitive fairness in the sector. 

In Europe, PSD2 will soon be replaced by the updated version – PSD3. 

We will also likely see tighter regulations around data protection, with standards like Europe’s GDPR setting the bar for how platforms handle user data. For cross-border transactions, platforms must navigate varied regulations to ensure secure, compliant data transfers internationally. 

Increased Consumer Awareness and Trust

To unlock the full potential of open banking, platforms need to boost consumer trust and awareness. Many people are still hesitant or unfamiliar with the concept of securely sharing financial data. 

Going forward, open banking platforms will likely prioritise educating users on the benefits and security of data sharing. Trust-building initiatives, such as offering clear assurances and transparent policies, can help increase user confidence. 

Additionally, as trust grows, platforms will keep improving the user experience—making it simpler to connect accounts, manage permissions, and access personalised services easily.

Final Thoughts

The future of open banking platforms is filled with exciting possibilities. As they expand beyond payments and data aggregation, these platforms will become essential tools for managing all aspects of personal and business finance. With advancements in security, broader industry adoption, and the potential rise of open finance, these platforms will shape the financial services landscape in ways that benefit both consumers and businesses.

While challenges like regulatory compliance and consumer trust remain, the continued growth and evolution of open banking platforms are set to make finance more accessible, transparent, and innovative.