Imagine: The Future of Open Banking
Open banking is a financial concept that involves the use of open APIs to enable third-party developers to build applications and services around financial institutions. It allows customers to share their financial information securely with third-party providers, giving them more control over their financial data and enabling them to access a wider range of financial products and services.
Put another way, open banking empowers consumers by giving them more control, choice, and convenience in managing their finances, while also fostering innovation and competition in the financial services industry.
What can that mean in the future for us on the consumer side? It means instant transfer of any type of currency to another person without jumping through hoops. It means having custody of your own money while still having access to savings-account style returns. It means financing large purchases with digital assets you have custody over. It means the ability to create trust between complete strangers without traditional middle men.
I want to take a minute and explore what that means for us as consumers. Imagine a few scenarios with me.
You walk into a car dealership to buy a car. You have your own self-custody wallet app, BankSocial. Within the App, you apply for a loan from the BSL DAO through Loans.BankSocial.io to finance your car purchase. Your monthly payments come straight out of your self-custody wallet automatically. There’s no dance with the finance department of the dealership — you know the terms of your loan and your assets stay where they are. You sit on your couch, and in a few taps, you approve the monthly payment on your car loan and decide on the currency or mix of currencies that will pay it.
You are running a small business. You need to get a loan to invest in commercial kitchen equipment quickly to support the new menu and expanded dining area. You get financed through the BSL DAO and purchase them quickly so you can generate revenue.
You’ve had an account with a traditional bank your entire adult life and the money sits in the checking account because the savings account has no benefits or returns. The bank has all of your money; you have to trust that they won’t mismanage the assets and lose everything. Now, instead of that traditional account, you stake your assets in your BankSocial app and get regular, predictable returns. Your money works for you, but you retain custody of it.
You are on a restaurant near the beach on vacation in Mexico. You grab an appetizer and a drink. Before you get up, you open the BankSocial app, scan the QR code at the table and tap the currency you want to pay with on your side. The restaurant gets a confirmation of a payment in their preferred fiat in seconds, and you fold your napkin and stroll back to the sand.
Open banking means flexibility. It means having the agency to bank yourself. And it will mean convenience on a global scale. I honestly can’t wait to see what the future holds.
-Written by Jay Reed
