Since the open banking initiative was launched in Europe it has caused significant changes in the banking industry. The skyline of financial services was hugely influenced by upcoming Fintechs that made their main target to improve service quality. These financial services included payments, budgeting, lending applications, credit score evaluations and many more. AISP became one of the main systems that drove innovation forward. What is AISP (https://nordigen.com/en/products/account-information/) and how can a business benefit from it?
What is AISP?
The idea of open banking is to increase the speed of complex and gruesome data collection methods. Lenders and financial institutions digitised their processes which led to instant data aggregation. The Account Information Service Providers (AISPs) are the ones who have the ability to obtain personal account data from their financial institutions. Moreover, it can be done not only with individual accounts, but business account data likewise. Nevertheless, a company must have customers’ consent before accessing the financial data.
For instance, in the UK, if an AISP requests someone’s financial data, larger banks are bound by law to comply with the request. Here arises open banking which facilitates information access to be done fast as lighting though with maximum level of security.
Why is AISP important?
AISPs gather and digest financial information the way it is easiest for a person to concede. It helps to evaluate their financial situation, create and maintain a budget and monitor spending performance. These tools analyse and exhibit financial information retracted from all customers’ financial institutions.
By gathering financial information in one place AISPs yield an opportunity for customers to easily dispense it with loan lenders or brokers. Also, lenders use derived data and metrics to improve the credit and affordability decision-making method. It streamlines the loan application process since borrowers can gain funds faster and lenders can be assured that there are no disguised risks.
It is crucial to understand that while AISPs can accumulate and analyse clients’ financial information, they have no power over the funds. They can only see, but can’t touch. To gain the license for this process still requires precise application processes and AISPs must hold a valid license to perform any operations.
Moreover, banks and lenders are not the only ones who use AISPs. For illustration, chain stores can analyse your purchasing behaviour, evaluate buying patterns and adjust their strategy based on the outcome. It could lead to different follow-up strategies or specialised marketing campaigns segmented according to classified buying performance.