Understanding Open Banking: How Companies drive the Future of Finance

What is Open Banking?

Consider Open Banking as a means of safely linking your bank account to applications that assist you with bill payment, spending tracking, money management, and even loan applications. Open Banking lets many apps access your bank information with your consent without jeopardizing your security. Thus, you can view everything in a single app rather than having to log into several accounts, which simplifies and connects your financial life.

What Do Companies Like Plaid , MX , Envestnet | Yodlee , and Fincity Do?

These businesses serve as go-betweens for banks and applications, enabling secure connections between your bank account and apps like PayPal , Robinhood , and Venmo . Behind the scenes, they manage the "plumbing" by:

1. Data Collection: They provide your account data, including balances, transactions, and income, to the apps you use after obtaining your consent.

2. Ensuring Security: They use robust security standards, data masking, and encryption to ensure your data is safe.

3. Simplifying Access: You may grant these platforms access only once, and they will handle the rest, saving you the trouble of typing bank information into each new app. While putting data security and privacy first, Open Banking is using these platforms to power a variety of financial solutions that simplify money management.

Here’s a breakdown of how each of these companies compares:

Comparison between key platforms harnessing the power of Open Banking

Each of these platforms provides the secure connections needed to power today’s most popular financial apps, and the choice depends on whether you need consumer-friendly integrations (Plaid), data accuracy (MX), global reach (Yodlee), or credit verification (Finicity).

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