Bridging the Gap: The Impact of Open Banking on Traditional Banking and FinTech Collaboration

Abstract

Open banking is revolutionizing the retail banking industry by allowing customers to share their data with third parties. This facilitates the entry of new companies into the market, promoting increased competition, innovation, and improvements in processes such as customer registration and fraud management. The banking sector is shifting from traditional closed models to a more open and innovative framework, emphasizing the collaborative relationship between established banks and FinTech companies. As regulatory frameworks evolve, open banking disrupts traditional banking practices by promoting transparency, data sharing, and customer-centric services. This research paper examines the growing partnerships between traditional banks and FinTech firms, highlighting how collaboration enhances innovation, agility, and customer experience. By analyzing current trends and future implications, this study demonstrates how open banking is reshaping the financial ecosystem, ushering in a new era of collaboration that ultimately benefits consumers and drives industry advancement.