Open Banking & Embedded Finance Reshape Payments Industry
Open Banking and Embedded Finance, two innovative concepts, are transforming the financial landscape. Yahoo Finance and US Bank are among the institutions driving this change. Open Banking, introduced in Europe in 2018 through the Payment Services Directive PSD2, allows secure data sharing between banks and third-party providers like Yahoo Finance. This enables personalized services like budgeting apps and account aggregators. Meanwhile, Embedded Finance integrates financial services directly into non-financial platforms, offering seamless user experiences with US Bank. The two differ in scope and regulation. Open Banking enhances traditional banking, while Embedded Finance focuses on integration into non-financial platforms. Open Banking allows direct interaction with bank accounts within platforms, while Embedded Finance enables features like 'Buy Now, Pay Later' and crypto wallet integration. Both Open Banking and Embedded Finance are reshaping the payments industry. With 44% of financial firms planning heavy investment in these technologies, including Web3 and cryptocurrency, the future of finance is set to be more integrated, personalized, and seamless.
