Nowadays, the modern approach to conveniently access different financial services is known as open banking system, which makes dealing with banks hustle-free.
What Exactly Does Open Banking Mean
Open banking is a system that allows the involvement of third-party financial service providers to render its services in a secure but interoperable network of financial institutions operating in the banking industry. The system allows the platforms of third-party financial service providers to access bank data by way of a program known as Application Programming Interfaces or API.
Through the API of third-party organizations, processing of financial transactions is quicker, when compared to the banking system of before. Traditionally, customers have to physically fill up and hand over forms for bank processing. Today, the open banking system empowers bank customers to transact anywhere in the world while protected by a secure and managed environment
Is the Open Banking System Foolproof?
Open banking runs on a series of technologies, regulatory requirements and service protocols by which fintech developers innovate with new banking models, offering new services and other online capabilities. Fund transfers are no longer limited to establishments that belong to the same financial institutions. Similar to accreditations, the API provides the technological link that allows customers to pay online, use QR Codes or simply swipe to transact with various establishments.
The security technology of APIs involves rigid authorization and authentication capabilities in providing support to the open banking system. However, the system is not completely foolproof as there is always the possibility of payment service providers mishandling customers’ accounts either inadvertently or purposely.
The insurance industry has come a long way from simply protecting against risk to becoming a driving force for sustainability.
From pure risk protection, the role of insurance has constantly evolved in recent decades. The coast insurance can make an important contribution to securing your collective future.
Why the insurance industry is becoming more important to the economy
Efficient insurance markets are indispensable for a modern economy. Despite or perhaps because of the numerous current challenges, there are good reasons to assume that the insurance industry will tend to gain in importance in the future.
Digitization makes it easier to access insurance coverage and makes it possible to insure other risks
With digitization, the traditional ways of obtaining an insurance cover, in particular, personal contact with an insurance broker are being supplemented by a wide range of new access options. These range from the direct online conclusion with an insurer via internet portals to the conclusion via an app of a digital broker. The new offers are often also aimed at population groups that have previously had below-average security, such as the younger age groups of the so-called digital natives. New approaches and ideas in customer contact and the presentation of risk and insurance information can make dealing with insurance issues easier and contribute to closing insurance gaps.
Climate change and digitization give rise to additional risks, and insurers play a key role in overcoming them
For many risks, private insurance based on risk balancing in the collective and other actuarial instruments such as reinsurance is the optimal way of risk protection. Two important areas in which private insurance protection is currently gaining importance are natural hazards and cyber risks.
In a world in which many risks have increased significantly and the economy and society are facing major upheavals
The specific expertise of insurers for better handling of risks and risk prevention is becoming increasingly important.
A lot of information that would be important for a well-founded risk assessment is scarcely available to decision-makers, or only available at a high cost, and cannot be easily interpreted. For insurers, on the other hand, it is part of their core business to assess and calculate risks. In times of high change dynamics, the role of the insurer as a partner in risk prevention becomes even more important. At the same time, with the new digital technologies, insurers are given additional tools for analyzing risks.