Wealth management
Open banking-powered investment apps have brought wealth management services to a much wider audience, by combining low fees with a low barrier to entry.
With a complete and up-to-date picture of a client’s assets and liabilities, the traditional wealth management sector is also realising how open finance can reduce processing costs and develop highly personalised propositions across a wide range of incomes.
This will help to deliver better deals, more relevant products and services, and to ensure that those products are suitable in the long term enabling more effective financial planning.
Other benefits that could be delivered by open finance include faster onboarding for clients, digitally-driven financial advice and even instant matching of deposits allowing for frictionless funding and trading without having to wait for payments to clear.
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Pensions
While pensions were not in scope for open banking, the pensions industry is already making use of the technology to, for example, facilitate faster and simpler payments into plans via pensions apps. They also have a clear part to play in developing open finance.
A leading UK pensions provider has partnered with an open banking platform to provide its 1.5 million scheme members with real-time data on their spending and saving activity across a range of financial products.
It offers members a complete view of all their finances, allowing them to connect their bank accounts, loans, pensions, mortgages, credit cards, ISAs and other financial products, to review and monitor in a single dashboard.
As well as providing an overview of their short, medium and long-term finances, it connects to other services, including a pensions finder, benefits finder and a 'rent recognition' tool.
Like the tools mentioned earlier, this aims to help renters trying to get on the property ladder by identifying potential rent payments and facilitating reporting to credit reference agencies, which could boost their credit score.
This single holistic overview of all an individual’s finances was a key part of the original vision for open banking.
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