The Rise of Open Banking in Africa
Published on: September 25, 2024
Sometimes people are skeptical about sharing their details with financial institutions, but what if doing so could give you access to better services and tools to manage your money? That’s the idea behind open banking. It lets you securely share your banking information like account balances and transaction history, in a secure way with trusted companies to get more personalized financial help. In Africa, this approach transforms how people handle their finances, opening doors to new opportunities. So, how does it work, and what could it mean for the future of banking here?
How Open Banking Works
Open banking lets customers decide to share their financial information, such as their spending history or account balances, with other companies. These companies use special technology, APIs (Application Programming Interfaces), to securely access this data. Customers stay in control and must agree before their information is shared.
Companies that receive this data, called third-party providers (TPPs), can use it to offer services that are personalized, like helping people manage their money better or offering new ways to make payments. Banks and financial technology companies (fintechs) work together to create services that fit the needs of different people and businesses. This openness also encourages healthy competition among financial institutions, pushing them to make products that better serve their customers.