But with so many possibilities, how do you pinpoint the ones that genuinely add value to your business?
You might be struggling to understand how open banking can truly benefit your business, and you could even be leaving untapped revenue streams on the table.
To give you some ideas on how open banking can help your business, we’ve compiled 20 game-changing use cases that are driving financial innovation across industries.
In this article:
Prefer to talk to an expert about how open banking can help your business? Book a no-obligations call with one of our team.
1) Identity verification
Around €5.7 billion is lost during the onboarding process. Why? Because financial services still rely on physical documents for identity verification. The paradox is that paper documents are riskier than digital credentials. In fact, they’ve contributed to a surge in identity fraud. But with access to data, companies can:
- Retrieve identity information in seconds
- Validate a customer’s source of wealth
- Pull data to support fraud analysis
Which industries can benefit?
Financial services have the most to gain, particularly banks and lenders who still follow traditional verification processes. Wealth management can also leverage open banking to protect customer assets against sophisticated account takeovers.
2) Personal finance management
With every corner of the country feeling the effects of inflation, personal finance management has become a significant use case. Data aggregation enables companies to access and combine customer bank account data, providing tailored support with money management and actionable insights.
Which industries can benefit?
Personal finance apps are the vanguard of helping consumers and businesses take control of their money. Digital banks can also leverage account aggregation to deliver better money management tools. Outside of banking, accounting can facilitate streamlined cash flow management for businesses.
3) Payment reconciliation
Accessibility aside, spreadsheets weren’t made to hold a year’s worth of financial data. So why do three million SMEs still use them? Open banking enables smart reconciliation by enabling businesses to see all of their transactions in one place.
Which industries can benefit?
Access to data unlocks new opportunities for accounting and bookkeeping. By aggregating data in one place, businesses and accountants can quickly resolve any discrepancies, rather than piecing together transactions like a jigsaw puzzle.
Customer spotlight: Crezco
Crezco offers their customers a quicker, more convenient checkout solution helping them get paid faster and safeguard their cash flow. This means less time chasing late payments. Crezco also provides greater visibility and clarity to its customers, and their customers, by providing certainty of payment and automating the reconciliation process.
You can read more about our work with Crezco here: How Crezco + Yapily optimise payments for 5,000+ businesses
4) Income verification
Whether it’s lending or renting, proof of income is at the core of a decision. It’s a lengthy process, particularly for those who are self-employed. In fact, business owners are twice as likely to be rejected for a mortgage. But with open banking, income verification is instant.
No payslips, no bank statements, and no tax returns.
Which industries can benefit?
Lenders can bring income verification into the digital age with access to financial data. Aside from improving the overall lending experience, it opens up a wider pool of borrowers. Outside of lending, proptech firms can ensure tenants will cover rent payments on time.
5) Affordability check
Affordability is key for lenders, whether it’s consumer or business lending. But, when only considering a small snapshot of a potential borrower’s financial position, it can be difficult to understand real affordability. Open banking enables lenders to analyse financial data for up to two years, providing a clear and accurate affordability profile.
Which industries can benefit?
With access to financial data, lenders can make more informed decisions that are no longer based on a limited snapshot. Car finance providers can also benefit by pre-approving customers before they begin the application process.
Could open banking affordability checks improve your business operations? Get in touch to find out how to get started.
6) Creditworthiness assessment
While affordability determines whether an applicant can afford to borrow, creditworthiness looks at how likely they are to pay it back. Credit scores are a fundamental deciding factor. But those three-digit numbers disregard millions who are still improving their finances. Open banking allows lenders to access real-time insights, so they can make more informed decisions about who to lend to.
Which industries can benefit?
Similar to affordability assessments, open banking helps lenders in all industries gain a clear understanding of an applicant’s creditworthiness based on real-time up-to-date data. So, lenders can have confidence in who they’re doing business with.
Customer spotlight: Salad Money
Salad Money eliminates the stress of borrowing with poor credit by offering in-application loan affordability and benefit checking services. Harnessing open banking, Salad Money is able to retrieve and analyse up to two years’ worth of transactions and spending data to provide NHS and public sector workers with an automatic review of their benefits and credit entitlement. Now, over £20 million has been lent to thousands of individuals.
Want to know more about how we helped Salad Money? Read more: 60 second success story: Salad Money + Yapily
7) Account top-ups
We pay by card for most things. But, card payments aren’t all they’ve cracked up to be. Take account top-ups, for instance. Depositing by card can take hours to be approved. But with account-to-account payments, settlement is instant.
Which industries can benefit?
Crypto, wealth management and company wallets can all benefit from the security and speed of account-to-account payments for frictionless deposits and cost-effective withdrawals.
8) Invoice payments
Paper invoices haven’t gone anywhere, and they’re fuelling a late payment crisis among small businesses. Since invoices have always been paid by bank transfer, open banking payments are essentially an upgrade. The only difference is that they can be embedded into the checkout flow for a fast and frictionless experience.
Which industries can benefit?
Open banking eliminates the physical paperwork involved with invoicing, which is common in the trade industry. Open banking also revolutionises invoice financing, a form of short-term borrowing extended by lenders. While it’s not quite there yet, open banking is predicted to become a popular mode of payment for utilities.
9) Payroll
Historically, it’s been impossible for businesses without a corporate banking account to bulk-pay salaries from the same bank account…until now. At Yapily, we recently launched our award-winning Bulk feature in partnership with Comma. Now, businesses can submit payroll from their phone or desktop in one go.
Which industries can benefit?
Accounting can harness bulk payments to improve operational efficiency and offer new payment services to their customers. It also gives rise to accounting software and tools for small businesses to bulk-pay from their own bank account.
Customer spotlight: Comma
Comma saves finance teams around 77% of the time usually spent each month processing bulk payments. Through the power of open banking, Comma simplifies the complex bulk payments process, so SMEs can submit payroll at once from their existing business bank account. This automates the entire process to save the manual headache of entering individual details for every salary payment.
Read more about our work with Comma: 60 second success story: Comma + Yapily
10) Intelligent savings
Having been mandated in July 2022, Variable Recurring Payments via sweeping are relatively new. But, they’ve already proved to be popular in helping consumers build saving pots. Considering 10.7 million adults in the UK rarely or never save, sweeping has the potential to help people break volatile borrowing cycles.
Which industries can benefit
Personal finance apps and digital banking can use sweeping to monitor disposable income and spare money in customer accounts. They can then automate sending that money into other accounts to maximise savings potential.
11) Smart overdrafts
The Financial Conduct Authority (FCA) revealed that nearly 13 million overdraw annually. But Variable Recurring Payments are making it easier for customers to pay off outstanding overdrafts by automatically transferring money from other accounts.
Which industries can benefit?
Digital banking and personal finance apps can use open banking to monitor a customer’s overdraft status. When the customer enters a negative balance, money can be automatically swept into that account.
12) Refunds
E-commerce is booming and purchase volumes are mounting, but issuing refunds through card networks is challenging. It can take days - even weeks! - for consumers to get their refunds back. Now, merchants can use virtual accounts to collect local open banking payments and fulfil refunds on Faster Payments rails.
Which industries can benefit?
Merchants and payment service providers (PSPs) can create multiple virtual accounts to collect payments and initiate instant refunds. This creates greater visibility over the payment status and more control over the flow of funds.
13) Peer-to-peer payments
Until now, bank transfer has been the only way to send money to friends and family. But did you know that more than £700,000 is lost to bank transfer scams every day? With open banking, payments are so secure that fraud is out of the question. All customers have to do is select an amount, bank account, and recipient.
Which industries can benefit?
Digital banking and money management apps can tackle bank transfer scams by leveraging open banking payments to make transferring money more secure.
14) Multi-banking
Multi-banking allows consumers (yes, you!) to view all of their financial accounts in one place. And since 1 in 3 of us has more than one bank account, it gives customers a holistic overview of their financial health. But, multi-banking does more than aggregate bank balances. Customers can also:
- Make informed budgeting plans
- Know when payments are due
- Identify unwanted subscriptions
- Spot fraudulent transactions
15) Treasury payments
Intriguingly, corporations still rely on manual processes to reconcile and manage company payments. With open banking, treasury teams can surface transaction data and make instant payments in one sweep.
Which industries can benefit?
Open banking enables corporate banking platforms to help treasury teams make informed financial decisions, as well as establish automated processes around reconciliation, payroll and cash flow forecasting.
16) Subscription payments
The subscription economy is predicted to be worth $1.5 trillion by 2025, representing a significant use case for Variable Recurring Payments (non-sweeping). Unlike existing recurring payment methods that are clunky and prone to error, Variable Recurring Payments are smooth. And most importantly, customers are in control.
Learn more about Yapily Recurring Payments here, and how it compares to Direct Debit here.
Which industries can benefit?
While non-sweeping isn’t yet mandated by the Open Banking Implementation Entity (OBIE), a pilot is already underway to bring this use case to fruition. For payment service providers (PSPs) and merchants offering subscription services, Variable Recurring Payments will undercut Direct Debit on price and improve speed.
17) Debt collection
Historically, debt collectors haven’t been known for taking a customer-centric approach. But, that’s about to change with open banking. By having secure access to financial data, they can easily identify vulnerable customers and adjust repayments accordingly. Moreover, customers can set up Variable Recurring Payments with full control over the payment parameters.
Which industries can benefit?
For debt collection agencies, open banking payments are affordable and efficient compared to traditional bank transfers. Plus, they remove the reconciliation headache for payment teams when references are missing from transactions.
18) Point of Sale payments
Two-dimensional codes (a.k.a. QR codes) are becoming increasingly popular for making open banking payments in the physical world. Customers benefit from speed and security since payments are embedded with Strong Customer Authentication (SCA). Businesses benefit too, with no hidden processing fees and faster settlement.
Which industries can benefit?
Payment service providers (PSPs) and merchants can benefit from the efficiency of QR codes and the security of account-to-account payments.
19) Tailored insurance
Without realising it, many consumers and businesses are on the wrong insurance plan, or worse, uninsured. In fact, one in four UK households - that’s 6 million people – have no insurance. Open banking enables insurers to access buyers’ financial data, so insurance plans can be tailored to their financial circumstances. The result? Open insurance.
Which industries can benefit?
With access to financial data, insurance firms can tailor plans based on a customer’s real-time financial position. What’s more, they can pre-approve customers before they begin the application process to reduce drop-off rates.
20) Loyalty programmes
While it remains an untapped use case, open banking has the potential to breathe new life into loyalty programmes. Interestingly, a fifth of customers don’t use their loyalty cards anymore, losing a whopping £257 in benefits every year. But with access to data, businesses can personalise rewards to foster customer loyalty.
Which industries can benefit?
Merchants have a unique opportunity to gain insight into customers’ buying histories and personalise loyalty programmes based on real-life customer data. While retailers haven’t realised its potential yet, we predict it’ll become a hot use case in the future.
Exploring your options? Check out our Open Banking Buyer’s Guide to understand how to vet providers and choose the best partner.
Why choose Yapily to implement open banking?
We’re Yapily, an open banking infrastructure platform that enables businesses to securely connect with thousands of banks and institutions across the UK and Europe.
We provide the underlying technology that allows businesses (like yours) to access financial data and initiate payments using open banking.
We can help you implement open banking into your business to handle:
Payments: account to account payment initiation service, variable recurring payments (VRP), commercial VRP, and bulk payments.
Data: Access to real-time financial insights, transaction categorisation, data enrichment, and customer validation.
So why should you partner with Yapily to integrate open banking?
Here are three key reasons:
1. You’ll get one of the best UK and European coverage across both payments and data
One of the main challenges companies face when implementing open banking is being able to offer it to all of their customers. If you only connect with some of the banks or institutions in your region, you’ll only be able to implement open banking across a few customers and therefore miss out on most of the use cases listed above.
At Yapily, we connect to over 2,000 banks and institutions across Europe and UK. We offer coverage in 19 key countries, including the UK, Netherlands, Germany, and France, making us one of the open banking providers with the most extensive coverage.
This broad reach enables you to work smoothly across borders and expand your customer base without dealing with multiple providers for different banking systems, which can be clunky, expensive, and tiring to manage.
That’s why companies like American Express choose Yapily to offer seamless Pay by Bank services across Europe.
2. Increase your customers’ checkout conversion rate with our white-label infrastructure
Imagine this: the end customer is about to complete a purchase and trust the merchant with their payment details. But just before they click ‘Pay,’ they notice an unfamiliar brand name pop up.
This small moment of doubt can quickly turn into hesitation—is this transaction legitimate? That small distraction could be all that’s needed for the end customer to abandon their cart altogether.
Unlike many competitors who force their own branding and user experience on you, Yapily allows you to fully white-label our solution, so the merchant’s brand stays front and centre throughout the entire payment process.
You have full ownership and control over the user experience within your application. You build and self-host the user-facing screens, while the Yapily Validate API powers the data connection behind the scenes.
This setup allows the customer to autofill payment details during the sign up process, speeding up the process and therefore the checkout conversion rates.
For those looking to enter the market quickly, we also offer a streamlined, less customisable option via Hosted Payment Pages, ideal for testing the waters while still maintaining brand integrity and consistency.
3. Get open banking set up quickly with our enterprise-ready API and processes
As an enterprise company, you want to work with an open banking provider that can handle large volume, has the right level of security and has pricing adapted to your volume as you scale.
Yapily is ISO certified and has the right security infrastructure in place for large companies. You can choose to use our developer-friendly API to integrate into your customer journey, or you can also choose to implement our hosted payment pages to make it easier to set up your whole payment journey.
We also offer dedicated onboarding assistance and a responsive team. Our experts can even help you design user flows to help improve open banking performance and adoption.
Our extensive coverage, ability to handle large volume and our modern tech stack means we are a good fit for large enterprise companies.
Integrate open banking and empower your business with Yapily
After reading this article, you’re hopefully better informed on how open banking can be used your business—whether that’s streamlining identity verification, automating payroll through bulk payments, or enabling instant account top-ups.
Fortunately, getting started with open banking is straightforward when you use Yapily.
To find out more about how we can help your business implement open banking, get in touch with one of our experts.
