How investment platforms use open banking

| Article by: Laura AasheimProfile Image Laura Aasheim 5 min

We’ve come a long way from only being able to invest through the stock exchange. Today there are many more ways to make money grow. Digitisation is shaping the investment industry, but at a very slow pace (KPMG, 2018, 2). Adoption of new technology is slower than in other industries, but investment platforms have been taking advantage of the new technological age and becoming increasingly digitised. 


Investment platforms are changing

The investment platforms of today are becoming increasingly automated. Many companies are moving standard processes to robotic process automation (RPA) in order to reduce overhead and cost (Citisoft, n.d., 4). Automating processes solves the problem of time-intensive tasks, like manual bank statement entry. 

Cognitive technologies and AI are being used by investment platforms to perform calculations and actions replicating human behaviour. Developers have explored how to program applications to make higher-level decisions and store data to inform future ones - which known as machine learning (Citisoft, n.d., 5). Machine learning can be used to analyse data, recognise patterns and infer future trends, all of which can be used by investment platforms to recommend and advise users. 

Blockchain technology has made its way into investment and can remove friction and pain points from the investing process. For example, an operating issue commonly faced in investing is reconciliation. Blockchain offers an indisputable record for each transaction meaning the need for reconciliation is no more (Citisoft, n.d., 5). 


What is open banking?

Open banking is a banking practice that securely shares financial information, such as consumer banking transactions and other financial data, to third-party financial service providers (Estevez, 2020). Sharing data is done through the use of application programming interfaces (APIs) and only with the consent of customers (The Balance, 2020). Open banking is the driver behind both innovation and competition in the financial industry (Cahill, n.d.). 


Why do investment platforms use open banking?

Insurance platforms are using open banking to improve user experience and security. 

Open banking allows for the  easy onboarding of investors by removing ineficies. These include the need to manually upload documents, directly access financial data and perform instant credit checks. Furthermore, open banking allows for in-depth credit checks using enriched data to determine the eligibility of loan requests in P2P investing. Additionally, open banking offers a secure way for customers to transfer funds to and from their bank accounts. 


Some investment platforms companies you should know about

Mintos is a global marketplace for investing in loans, where retail investors can invest in a diversified way in income-producing assets. The company is rethinking how money flows across borders from those who want to save and invest to those who want to borrow. Mintos contributes to financial inclusion on a global scale and is a market leader with a 45% share in continental Europe.

TWINO disrupted traditional investment services by opening the market to the everyday person. They provide the same level of safety as incumbent banks and brokerages. The peer-to-peer (P2P) lending platform, as well as other services such as online consumer and business loans, levels the playing field and increases accessibility to the previously cautious financial industry.


What’s to come?

As the industry transforms and becomes more competitive, innovation in the investment management and investment platforms sectors will increase. The question is no longer if digitalisation will transform the industry, but rather if the incumbent asset management and investment companies will lead this change or be displaced by technologically advanced startups (Citisoft, n.d., 9). 



The Balance. (2020, October 11). What Open Banking Is and How It Will Affect You.

Cahill, H. (n.d.). InvoiceFair. The Evolution of Open Banking: Connectivity breeds digital competition.

Estevez, E. (2020, August 27). Open Banking. Investopedia.

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