The notion that we own our financial data and that we’re able to use it to our own benefit lies at the core of Open Banking. Open Banking has radically changed the banking industry throughout Asia, the UK and Europe. And it could make a difference in Africa too. By shifting the focus to the consumer, Open Banking allows you to decide who has access to your financial data – all for your own benefit.
Sharing financial data
Open Banking is about sharing your financial data through electronic and secure means. It’s important to note that data is shared through our expressed approval – permissions and privacy are a vital part of this.
Once approved, third parties (like 22seven) can access this financial information. They use it to develop apps and services aimed at creating a more cohesive and efficient banking environment for you. This means a better customer experience for you across all areas of your life where you need to involve your bank. Think taking out cellphone contracts, securing vehicle finance, opening investments and applying for visas.
Are you in control of your data?
For Open Banking to gain further traction, consumers need to be certain in their ability to control data usage. Open Banking regulations and privacy policies are at the forefront of this. A recent ruling made by the South Gauteng High Court has shed some light on who is seen to be in control of our data.
In summary, Liberty had allowed qualifying members to disclose existing memberships of third-party wellness programmes to them in exchange for discounted premiums. Discovery believed Liberty were infringing and unlawfully using data from their well-known Vitality wellness program. However, Discovery’s application was dismissed. The ruling stated the following:
“While the High Court focused on a number of previous cases, it ultimately noted that customers’ data from Vitality belongs to them and they (the consumers) are free to use it how they wish.” Simple as that – the data you provide to third parties belongs to you.
As seen from the court ruling, apart from Open Banking being a big deal for banks and insurers, at its core is that the data belongs to you, the consumer. So, instead of just being able to look at balances and make payments at your bank you can maximise the value you receive by sharing your financial information with third parties you choose.
Tools developed by third parties can help you save, invest and electronically streamline your access to credit. Keep an eye out for the next 22seven Blog Post later this week that will explore the benefits of Open Banking for South Africans!