As open banking becomes more established, open finance is emerging as the next phase, a report has found.
According to a new report from open banking platform Tink, regulators and industry stakeholders now see open finance and open data as the next frontier.
Open finance was found to be an important stepping-stone on the road towards embedded finance, open insurance, and open data economies.
While open finance only operates within the financial services industry, open data economies have the potential to move across all industries.
Tink said that embedded finance has the potential to change the role that lenders play, but in order to work properly, open data economies need to be formed to share data held by non-banks with banks.
The platform found the UK and Sweden are the leading countries for open banking in Europe, thanks to well-developed regulatory support and a tech-savvy population, while the US, India, and Hong Kong are ahead of many European countries because of market demand.
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“The most exciting opportunities are still ahead of us – we haven’t come this far for the journey to end here,” Daniel Kjellén, chief executive of Tink, said in the report.
“Open banking is evolving and expanding into open finance, which in turn will power the transition towards embedded financial services. In embedded finance, payments, loans, and even insurance become completely invisible to the customer.
“This has the potential to change the role that financial institutions play in our lives, from a provider of financial services to an enabler of all industries.
“That’s why the next step in this evolution process is the creation of open data economies. Customers expect to be able to rely on their bank wherever they go – and open data economies are the way to meet those expectations.”
Read more: Tink predicts open banking “boom” in 2022