When we talk about open banking, the most talked-about item is open banking aggregators. More and more people are hearing about them but far from everyone knows about what they are and what they do (their benefits). In fact, it may be said that as of right now, the developers who create open banking data aggregators are the most influential developers in the realm of fintech. So, let’s dive deeper into open banking aggregators and their functions.
What is an open banking aggregator?
As you know, open banking allows licensed developers and service providers to gather information and initiate payments per the request of the customer. The whole conceptual foundation of open banking revolves around the simpler and more efficient information and data gathering. So, open banking aggregators create and provide a unified and single API for connection and integration with numerous different banks.
If you implement an integrator, you can offer connectivity to the major banks and many different financial institutions, in turn, making your services more accessible to a broader range of customers.
For example, let’s say that you use a budget tracking app. This app can track your transactions in real-time, aggregating and collecting information from multiple banks and multiple accounts. This prevents people from wasting a lot of time logging in and checking their spending, tracking money flow in and out of the account. Instead of forcing you to spend time, data aggregators help save it.
So, an aggregator makes services more accessible and even more versatile because it allows connecting and/or gathering information from multiple sources.
Why is data aggregation important and what are its benefits?
Besides the obvious time-saving, data aggregation is also useful to the business that implements it as well as offers many other benefits to the customers, too. Let’s cover these in more detail.
Businesses that implement aggregators will have more data to process and thus, can do more in order to satisfy and please the customer. This results in lesser churn and higher retention numbers as well as better insights for marketing, advertisements, product placement, pricing, etc. In the world of today, data is one of the most important resources, and aggregators help you gather and process more data.
Even more so, businesses are able to implement aggregation for the sake of cutting costs. Aggregators provide access to many different banks through a single source, meaning that you don’t need to spend money or time developing individual solutions for each and every single bank, so they aren’t forced to check compliance regulations, and receive updates to always work without significant downtime or issues.
Aggregation is important because around 70% of consumers who have bank accounts in more than one bank would be interested and would definitely enjoy a solution where they could make transactions and manage their finances in different banks, all from a single app. It’s a no-brainer, really.