In the fast-paced world of today, convenience is king. From groceries to entertainment, we've become accustomed to accessing products and services at the touch of a button. This convenience is no accident; it's powered by a host of rapid innovations.
Subscriptions are perhaps the ultimate expression of this trend: The ability to maintain instant access to products and services, but only and exactly for as long as you need them. But another innovation – open banking – is helping make subscriptions even better.
What exactly is open banking, and how does it make subscriptions easier and more accessible than ever? In this blog, we're going to explore how open banking is transforming the landscape of product subscriptions, making our lives simpler and our choices more convenient.
What Is Open Banking?
The blockchain may get all the hype, but open banking is quietly having a massive impact on virtually every aspect of our lives today. At its most basic, it’s a system that allows financial institutions to share customer financial data securely with third parties. To do this, it uses a specialised technological middle-men, called an Application Programming Interface. You may have heard of it referred to as an API.
APIs are designed to ensure the seamless flow of data while adhering to strict security standards. This means more competition, enhanced innovation, and more choices in the financial and non-financial products and services for consumers.
Open banking has driven a wave of new companies in the fintech space, both in South Africa and abroad. Payment companies, investment platforms – and of course, subscription brands – have leapt to take advantage of the possibilities of the technology.
The Marriage of Open Banking and Product Subscriptions
While open banking offers benefits for a wide range of companies (and their consumers), we’re obviously most interested in its uses in subscription models.
And they’re plentiful:
1. Easy Payment Processing
Open banking simplifies the payment process for subscriptions. By securely linking your bank account to a subscription service, you can set up automatic payments without the need for credit cards or manual transactions. This not only makes the subscription sign-up process more accessible but also ensures that you never miss a payment.
2. Personalised Subscription Services
With access to your financial data, businesses can offer more personalised subscription options. Open banking enables companies to tailor their subscription services to your spending habits, financial goals, and preferences. This ensures you get the most value from your subscriptions.
3. Enhanced Security and Data Protection
This is one of the most important benefits of open banking: It’s built on an extremely robust security framework. This means your financial data remains highly secure while being shared with authorised third-party providers. Sensitive information is protected, and you have control over what data is shared and for what purpose.
4. Streamlined Budgeting and Financial Planning
Open banking simplifies budgeting and financial planning. Budgeting services built on open banking can easily track your subscription expenses, categorise them, and analyse your spending habits. This helps you make informed decisions about your subscriptions, ensuring they align with your financial goals.
6. Enhanced Customer Experience
With Open Banking, the customer experience is much, much better. Thanks to API’s ability to link directly to your bank, it’s easy to sign up for subscriptions, enjoy simplified payment processes, and access customised services that align with your interests and financial situation.
How Rentoza Uses Open Banking
Open banking is driving innovation in the subscription industry. With access to real-time financial data, businesses are coming up with creative subscription models and pricing structures that better suit the needs and preferences of their customers.
For instance, Rentoza has built a unique non-credit verification system that operates differently to standard credit checks. Instead, we use open banking to analyse your financial behaviour and determine the suitability of a subscription. This means that you don’t have to worry about whether you’ve built good credit using a credit card, loans, or store accounts; instead, you just need to manage your money effectively.
Using this method has a number of benefits: Not only have we got a 0% fraud rate, we’re able to open access to those who otherwise would be unable to buy essential products, like smartphones or appliances. And because we’re rigorous in our application of open banking principles, our customers are better protected.
That means a Rentoza subscription represents access, flexibility, and safety. All in one.
Open banking is ushering in a new era of convenience and choice in the world of product subscriptions. As it continues to shape the subscription landscape – and the business world beyond – you can look forward to a future where product subscriptions are more personalised, accessible, and tailored to your unique needs. So, embrace the power of open banking, and enjoy the convenience it brings to your subscription-filled life.
Because it’s not about commitment, it’s about access.