· Open banking is predicted to replace traditional methods of checking account holder information
· Businesses will benefit from open banking
· The world of remittances will experience further growth thanks to cryptocurrencies and other remittance technology
As more people transfer money internationally on a regular basis, open banking will likely dominate the banking industry sooner than expected, while crypto-based services will also gain ground in the remittance sector. Innovation will be the order of the day, according to analysts as the world moves away from traditional ways of doing banking.
According to Luke Ryder, the Director for External Engagement for Open Banking at Barclays, financial digital revolution will take centre stage this year. While open banking is similar to what many of the United Kingdom’s fintechs offer, there is still a need for massive support for it to be applied, experts note. While there will be questions about security and privacy, open banking APIs are expected to go mainstream to streamline processes.
Open banking will make things a lot easier for businesses to manage their accounts, according to experts. It is also noted by proponents of open banking that it will eliminate the paperwork needed to make business-to-business transfers.
Innovations in the remittance industry
Market leaders say that the remittance sector will keep on evolving too and will make fund transfers and payments more convenient for both senders and recipients. According to a report by The Guardian, there will be around 230 million international migrants by 2050, a market that will need technologically-advanced ways of sending money abroad. The remittance industry is a huge market as migrants worldwide sent $574 billion in 2015 alone. Despite a fluctuation in the years that followed, money sent by migrants is still in the billions and have the power to keep economically vulnerable countries afloat.
This is an industry that fintechs have been concentrating on. The likes of TransferWise and Xoom have been expanding their reach in the past few years due to the demand for better remittance services. Crypto-based services are also experiencing a lot of growth, according to reports.
Ripple’s XRP, for example, is currently working on massive adoption in the United States but observers say that it will not replace SWIFT just yet. However, the American company has a positive outlook for XRP’s future considering that it has the capability to send money within 3.5 seconds and that said funds are immediately spendable.
With overseas transfer rates a concern for many of the world’s labour migrants, cryptocurrency-based remittance services will become more popular than they were in 2018. Social media giant Facebook is reportedly joining the bandwagon too as it is rumoured to launch stablecoin for its international money transfer services. Observers say that if the rumours are true, it is indicative that crypto will be at the forefront in remittance innovation.
It is noted, however, that traditional money transfer services the likes of MoneyGram and Western Union will still be quite popular. These brands are evolving too and are now facilitating web-based and mobile payments.
Find out more about the innovations in the banking and remittance industry here.
