The Covid-19 pandemic has permanently changed how people transact online. This year alone has ushered in a significant uptake in digital financial services. As of September, the Bangko Sentral ng Pilipinas (BSP) reported that the volume and value of transactions for InstaPay rose by 758 percent and 466 percent, respectively, while PESONet volumes surged by 264 percent and its value rose by 160 percent year-on-year (“BSP: PESONet, InstaPay payments jump to P444B,” The Manila Times, Nov. 20, 2020). First-mover banks and financial technology (fintech) firms are teaming up more than ever, launching new solutions and working with regulators to ensure a safe, secure and reliable open-banking ecosystem. But what exactly is open banking and what real-world use cases are we seeing for small and medium enterprises (SMEs)?
Open Banking is a set of technologies, products and policies that enable customers to securely use financial services from qualified third-party providers. Banks and fintech companies are finding new ways to work together and go to the market with product innovations fast. Ultimately, this benefits customers by giving them more options and a better user experience. As part of a wider movement to give customers greater control of their financial data, open banking increases competition and access to banking services.