Open Finance, Open Data

The idea of Open Banking is already more than 20 years old. It was coined and promoted by Henry Chesbrough as part of the open innovation initiative. It took the regulators about 10 to 12 years to come up with the PSD2 regulation. 

Celebrating almost 10 years of PSD2, Europe is taking first steps towards Open Finance and Open Data initiatives. Europe's innovation is primarily driven by regulation. Companies are afraid to come up with new products if there's no regulation - you may be breaking it once it's introduced. In the best case scenario you will have to change you product or totally scrape it - losing money and blocking resources.

Open Finance goes one step beyond the open banking and refers to third-party access to financial data outside of the area of payments. An example of open finace would be the insurance company offering an overview of existing pension products or the access to loans and deposits data from different banks in one application.

Open Finance is already being implemented and it will be very helpful for any cross border related financial activities. Whether you need to open a bank account in a new country or apply for a loan in a new jurisdiction - you will be able to do it by giving your new bank or a loan provider access to your current data.

Despite the fact that Open Finance is a big step into the right direction, we all know that it's not the final one. We're moving towards the Open Data age and it will change the rules of the game for everyone.

Open Data will give third party access to all the data an individual creates. It will cause a ripple effect that will shake all the companies playing the Open Data game. Once the open data regulation will take effect you won't need to buy a determined data package by your mobile data provider. You will be able to analyze how much data exactly you use on a monthly basis and will be able to choose the most customizable package for your needs.

As we are talking about the access to the data, the security aspect will get even more importance - where there is access, there is data breach.

Europe’s Open Data Initiative is a major step toward a digital and data-driven economy, that is supposed to empower businesses, researchers, and policymakers. The use of open data needs a lot of AI and ML capabilities to thoroughly analyse the big masses of the scattered data points and offer the customers the best possible products. 

In addition to that the product providers need to completely revamp their product creation capabilities. The products will have to be very flexible but in order to make them flexible and customizable most companies will have to heavily invest into big data, machine learning and AI. They will either become a tech company or they will use a third party

The competition will get more fierce and many companies will have to quickly become highly tech driven otherwise they will face the getting out of business threats.