Open Banking has landed in South Africa, with the recent launch of Spot Money – and it’s going to change the way consumers manage and control their money by giving them more choices around banking and financial services.
But what is Open Banking? Why does it matter? How will consumers benefit? We asked Andre Hugo, the CEO of Spot Money, to give us the lowdown.
What is Open Banking?
First and foremost, Open Banking is bank neutral. That means it works with any bank and financial service provider to give you more choice when it comes to managing your money. It also gives customers the freedom of choice to select available offers from multiple service providers.
How do I benefit?
The biggest benefit is greater control and choice when it comes to your money and financial affairs. You’ll be able to budget, bank, find the best deals, manage all your various accounts and services, and shop for new products and services – all on a single platform.
It also makes moving your money far easier by bringing all your payments into one place. This means being able to transfer money instantly between different bank accounts, credit cards, and savings and investments, and being able to pay family and friends in an instant on a range of platforms. You can scan any QR code to pay, or tap-to-pay from your mobile, for example.
Importantly, Open Banking on the Spot app and through the Spot marketplace will also offer consumers customised offerings that add value and are based on their lifestyle, behaviour, and budget.
Okay. So how does open banking work in real life?
Say you’re looking for insurance. Your Open Banking platform accesses your credit score, looks for products based on your needs and budget, and then offers you choices from a range of service providers. Or if you want to buy a house or a car, the Open Banking platform will provide the home loan or car finance provider with much of the information they need without having to fill in numerous forms.
How safe is Open Banking?
Open banking works within the safety and security of the existing banking infrastructure, and is therefore inherently as safe as banking. But the big thing about Open Banking is that it puts you in full control of who you choose to share your information with. Remember, it’s always your choice. You choose which services you want, and which providers access your information.
“Open Banking is undoubtedly the most exciting area of financial services transformation today. The way in which traditional banks and Fintechs interact with one another is changing dramatically as open banking becomes the norm. We’re poised to develop Spot Money as a major part of this evolution in South Africa,” said Hugo.