Since the beginning of open banking, it has caused a dramatic transformation in the financial world. Open banking brought a revolution to all viewpoints of the industry starting from payment solutions, budgeting tools and finishing with lending and credit evaluations. Soon after, AISP open banking was included as part of open banking.
The main purpose of open banking is to streamline the information flow process and enable secure data payments to be requested from banks. Therefore, companies who offer open banking are regulated and licensed providers, who must maintain an open banking process.
To get started with an open banking system a financial service provider must obtain authorisation and be registered either as an Account Information Service Provider (AISP) or Payment Initiation Service Provider (PISP). Only then it can access open banking APIs and experience their full potential.
What is AISP open banking and its purpose?
A business with AISP authorisation can request permissions to access and gather consumers personal or business financial information derived from all their bank service providers. Information gathering brings a financial service or tool to a client which helps them deal with their finances.
If a business holds an AISP open banking license, then it can only read the information but have no direct access to the funds. This means that a client has no risks of fraud as the money is not available to the provider. If a business is authorised for PISP, then it can reach clients money and initiate payments on customers behalf.
Services that are licensed for the use of AISPs provide assistance with price comparison, money management tools, loan applications, and in general speed up the aforementioned processes.
To gain authorisation for both AISP or PISP a business has to undergo a meticulous application process with the FCA. However, it is rather irregular for a business to hold both licenses and they usually focus on being authorised for either AISP or PISP.
Whichever route a company chooses, to gain access to the client’s financial information it must have customers consent. When giving consent, the customer needs to comprehend what data will be gathered, how long it will be available and who will be able to access it. Digital consent stands as part of GDPR regulations throughout Europe.
Advantage of AISP open banking
To gain access to financial information through AISP open banking is one thing, but to understand how it works and how to use it to full advantage might take research and examination. Therefore, financial institutions that clasp the innovation can generate distinct tools that present limitless revenue sources and increase customer loyalty.