Open Banking Referencing

Referencing is a very popular practice in the world. It is usually used to verify the integrity and authenticity of someone’s claims or suggestions. In our world, referencing is used when one person or entity references another, mostly, in a positive manner. Most of the time, references are gathered for a job application, tenancy, loans, memberships, etc. In open banking, referencing is one of the major benefits that this concept enables. Using open banking, anyone can verify financial or personal information that could be necessary in order to progress further and be eligible for a service. Let’s look at open banking referencing in more detail.

Referencing is a popular practice but only in a limited number of countries. In many parts of the world, becoming a tenant is a process that is completely reference-free and thus, innovation in that regard is much slower, when compared to somewhere like the UK where tenant referencing is an integral part of finding accommodation.

What is Open Banking Referencing?

Open banking referencing is a tool that can be used for the verification of eligibility and data authenticity. Through the consent of the user, their data can be shared with third parties in order to validate their creditworthiness and financial stability, key elements for taking out loans or becoming a tenant.

As of now, the most common use for referencing through open banking is for tenants. In the past, in countries where potential tenants are obliged or required to turn in references, the process was exhausting and overly complex for the modern age. Just to provide sufficient documentation for the property owner, potential tenants had to visit and get at least a few different documents authorized. Planning visits, adjusting schedules, and possibly even going across town to get a few papers were needlessly challenging. Open banking solves that by streamlining and simplifying this process. But what is open banking referencing and how does it work, you may ask.

Referencing for open banking simplifies the way your finances are verified. One simple consent and login will allow property owners and potential landlords get all of the necessary financial information to verify your eligibility. In the past, you had to visit the bank and get an authorized and a stamped statement from them. This could take an entire day with the queues and scheduling. Nowadays, all you have to do is login via or authorize access with your main bank account and the automated open banking system should take care of the rest.

The service is able to gather, process, and pass your data, through APIs to the designated recipient. If your tenant is a company with an automated system, they could even auto-approve you in a matter of minutes. Once open banking referencing is active, you don’t need to gather, scan, print, or get signatures on any of your bank documents. Getting accommodation, verification for financial services and just accessing different services becomes much easier.

Open Banking Reference Architecture

The open banking reference architecture is slightly different, depending on the area of the world. That’s due to the regulations and the laws that surround open banking, in general. However, if you talk about open banking product reference data, it should be noted that regardless of their location, businesses and interested parties are usually evaluating the same data points, anywhere in the world.

Let’s look at an example of an open banking reference architecture

  1. The client accesses the service or the app that is the gateway for information processing
  2. The client expresses their intent and shows consent to share data for the sake of referencing
  3. Through an API, they are directed to the next view where they’re shown a comprehensive UI/UX screen with visualizations, showing the possibilities to be authenticated (log in)
  4. The user selects the most convenient method to log in and does it
  5. The data can be passed on after the user approves it for the final time
  6. The data is analyzed (usually by an AI algorithm) and processed within minutes

Once the data is processed, a response is shown on the screen, in the self-service portal, or sent out via e-mail, text message, or other channels of the customers’ preference. The data is usually compared with the models or the reference points in the database to authenticate and approve or deny the tenancy.

Future of Open Banking Referencing

In the future, it seems that open banking referencing should only increase in size and relevance. For now, the only better known and more widespread use of this technology.

However, a lot of organizations and developers are slowly rolling out or testing new ways to implement referencing to make their financial services and products better. Referencing via open banking could be used by clubs, to accept memberships, by companies to accept investments, and to guarantee contracts between multiple parties. Furthermore, even governments could rely on this technology to speed up residential status permit grants or make establishing your own business much quicker and easier.

In the future, open banking referencing could change the way that verifications are made. Everything could happen much faster and without any of the obstacles that with the involvement of modern digital technology are rudimentary and no longer necessary.

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