Open Banking: What It Is, Where It’s at, and Where It’s Going

Kassab, Mohamad; Laplante, Phillip A.

doi:10.1109/mc.2021.3108402

Cited by 8 publications

(6 citation statements)

References 3 publications

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“…Banks use API technology to exchange messages and provide customer information to fintech companies [6]. BIS [7] defines an API as "a set of rules and specifications for software programs to communicate with each other, that forms an interface between different programs to facilitate their interactions."…”

Section: Open Apimentioning

confidence: 99%

“…The first open banking policy was implemented in 2013 when the European Union conceived PSD2 to add a clause to the Payment Service Directive (PSD), obliging banks to share customer information with third-party financial service providers (TPPs) [6]. In 2014, the European Commission drafted PSD2, and in October 2015, PSD2 was adopted by the European Parliament before being implemented in January 2016.…”

Section: Open Banking Policymentioning

confidence: 99%

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New Sustainable Fintech Business Models Created by Open API Technology: A Case Study of Korea’s Open Banking API Platform

Oh,

Chung,

Cho

2024

Preprint

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Fintech facilitates financial inclusion by introducing new sustainable and accessible business models in developing countries. Open banking API technology is used by various fintech businesses in both developing and developed countries, with varying effects on financial markets. It changes the financial market distribution structure by separating financial product manufacturing and distribution and intensifying competition between traditional financial institutions and fintech companies. Fintech companies innovate by using this tool to create new business models. In December 2019, Korea established a standardized "open banking API platform," sharing an interbank payment network with fintech companies. It has since shown explosive growth, surpassing the trading volume of the UK, the country that introduced open banking APIs for the first time. This study analyzes new business models fintech companies created using this API technology. Based on existing literature, statistics from the platform operator (the Korea Financial Telecommunications and Clearings Institute), and investigations of 30 Korean fintech mobile applications, this study analyzes new fintech business models that provide financial services using this platform. These companies create sustainable business models by combining multiple APIs. Four representative business models (simple funds transfer, simple payment, cross-border remittance, and asset management) are analyzed to reveal how fintech companies create business models with open APIs.

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Section: Open Apimentioning

confidence: 99%

Section: Open Banking Policymentioning

confidence: 99%

New Sustainable Fintech Business Models Created by Open API Technology: A Case Study of Korea’s Open Banking API Platform

Oh,

Chung,

Cho

2024

Preprint

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“…2. Literature review and hypotheses development Kassab and Laplante (2022) describe open banking as both a paradigm and a financial ecosystem. As a paradigm, it encourages efficiency, flexibility, more choices, improved customer experiences and new opportunities.…”

Section: Ijbm 417mentioning

confidence: 99%

“…Prior studies have shown the positive impact of open banking on the financial system, e.g. by improving customer choices and experiences (Kassab and Laplante, 2022), increasing economic growth (Armstrong-Taylor, 2014), increasing innovation in financial services (Junarsin et al ., 2023), mitigating financial risks (Gozman et al ., 2018), increasing financial inclusion (Rastogi et al ., 2020), providing a better costumers experience as well as reducing costs and increasing revenue for banks (Gärtner and Fernandez, 2018).…”

Section: Introductionmentioning

confidence: 99%

“…Second, the extent to which open banking applications can produce positive changes in economic and financial transactions remains questionable (Murinde et al ., 2022). Third, more work is needed to examine open banking implementation, security, privacy and trust from other countries (Hjelkrem et al ., 2022; Kassab and Laplante, 2022). We chose to examine this phenomenon in Indonesia because the country is currently in a crucial phase of open banking and API development (Bank Indonesia, 2019).…”

Section: Introductionmentioning

confidence: 99%

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Is technology truly improving the customer experience? Analysing the intention to use open banking in Indonesia

Iman,

Nugroho,

Junarsin

et al. 2023

IJBM

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PurposeOpen banking, with its promise to revolutionise electronic transactions through open application programming interfaces (APIs), aims to bridge the gap between banks and non-banks, enhancing lending, payments, investments and funds distribution. However, does this bold innovation truly resonate with consumers? This study delves into consumer intentions to adopt open banking in Indonesia by leveraging the technology readiness model, scrutinising its antecedents and moderating factors, and identifying the key attributes that users anticipate.Design/methodology/approachThrough quantitative and qualitative approaches, this study answers the following questions: (1) Are financial service users ready to use open banking/open API applications? (2) What are the key attributes that consumer expects of open banking/open API? First, the authors developed a structural model based on the technology readiness model, distributed the questionnaire in eight major cities in Indonesia, analysed it using PLS-SEM and utilised a machine learning approach to unpack the main attributes expected from open banking.FindingsThis study’s findings indicate that customers are generally prepared to embrace open banking innovations. Nonetheless, to enhance public acceptance, certain factors should be emphasised, including organisational support, user-friendly technology, a comprehensive range of features, consumer financial literacy and banks' readiness to adopt open banking. In contrast to prior research, this study reveals that loyalty to traditional banking positively moderates the connection between customer value and the intention to utilise open banking. Additionally, the authors did not observe a significant moderating effect of financial literacy on the relationship between perceived customer value and the intention to use open banking.Originality/valueTo the best of the authors’ knowledge, this study is one of the few that comprehensively analyses the consumers' readiness for open banking in developing contexts. This study is expected to produce a theoretical contribution as well as effective and optimal policies for the financial services sector.

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An Assessment of Fintech for Open Banking: Data Security and Privacy Strategies from the Perspective of Fintech Users

Munasinghe,

Grandhi,

Imam

2024

Studies in Computational Intelligence

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Open Banking: What It Is, Where It’s at, and Where It’s Going

Cited by 8 publications

References 3 publications

New Sustainable Fintech Business Models Created by Open API Technology: A Case Study of Korea’s Open Banking API Platform

New Sustainable Fintech Business Models Created by Open API Technology: A Case Study of Korea’s Open Banking API Platform

Is technology truly improving the customer experience? Analysing the intention to use open banking in Indonesia

An Assessment of Fintech for Open Banking: Data Security and Privacy Strategies from the Perspective of Fintech Users

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