Open Banking is known in Spanish as “open financial architecture,” and it is a model under which users give authorization so that their financial information and the operations filed in a bank can be consulted and used by third parties to develop new products and services. This new “financial infrastructure” has spread to other developed and emerging countries, being compulsory sometimes, while in others, it has been through development promoted by voluntary regulation.

Open Banking helps to potentiate and improve current credit scoring models to offer more loans at a lower cost. Technological solutions of this type provide automatic and secure access to bank data through APIs; this allows companies to verify the income of their potential clients and have a “true and instantaneous” image of their real financial stability and payment capacity.

Accounting processes and their automation

Much is debated about accounting automation; usually, companies require staff to keep their accounting records, but the question is to what extent are these people necessary? Most times, they can automate certain processes to save costs and reduce manual control errors. The process ranges from accounts receivable, accounts payable, reconciliations, exceptions, accounting in all its areas to the maintenance of records that they could automate.

All these processes are carried out more easily through software, although they will require manual management at first; in this sense, everything tends to “move” towards the world of automation. As transactions are carried out in applications, they send information to accounting applications, and these applications maintain the records automatically. As banking activities occur, banking services through open APIs update accounting applications; automating manual processes allows these procedures to be more efficient and economical, but they are implemented correctly.

What is the bank doing?

At present, many banks do not offer their clients this Open Banking service as an integrated offer, despite the potential that this would bring to the bank’s development; therefore, it is necessary to proactively inform the client of the possibility of having free and automatic accounting software, which reduces expenses and increases efficiency. If this path is followed in the future, banks will integrate more services to their corporate clients, and thus these clients will not need to do their accounting. It is a fact that some banks are already incorporating these services as an added value, although some corporate clients still resist, arguing that they only require basic services.

What will come

Companies, like banks, have become complex structures and their accounting / financial systems are even more complex. This situation will change as software becomes more popular and conquers the global market; we will see how finance and open accounting will develop in the same proportion that open banking is doing today.

What do you think about this topic? Do you think the trend of open banking and online services will continue over time?

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