Digital Analysis
CreditVisible Website and App Features
Our website will have an API compatible with larger banks and financial institutions using open banking. That will allow bank customers to view their CreditVisible information within their bank app.
Alternatively, the mobile app will be the hub for our users with features that allow our customers to upload payment history verification and link with apps for companies like utilities, subscription services, etc. The mobile app will also have a searchable directory of apps tagged by location so that mobile app users can search for bank partners who recognize the CreditVisible financial wellness score for loan approvals. The app will follow a flat hierarchy in order to keep it simple for the user to focus on what matters most to them: their financial wellness and how to improve it.
Digital Technology & Platform components:
- Database stored in the cloud
- Mobile application available on App Store and Google Play
- Website with various access levels for CreditVisible employees, banks, partner organizations such as Netflix, AT&T, etc.
- Open banking API
- Email marketing platform
- Social media such as Tik Tok, Instagram, Twitter, Pinterest, etc.
Microservices-based Architecture
Microservices architecture promises a better future for CreditVisible and the financial industry. Leaning into open banking and platform banking will require a microservices architecture, which may not be an easy transition for the legacy financial institutions who are built on monolithic architecture.
This is because microservice architecture dismantles the tight-knit components of monolithic applications into a set of agile services that communicate via an open API. Because the services are separate, they can be optimized or scaled up individually without reworking the entire enterprise infrastructure. Similarly, if one service has a meltdown, the entire system is not also impacted.
Such tailor-made digital infrastructure does not come without its own limitations and challenges. Maintaining harmony among the sometimes long list of microservices requires a significant time investment and a highly skilled team of developers. CreditVisible will need to start small, building out only the necessary microservices such as collecting payment history from third party partners like utility companies, streaming services, etc.; generating a customer’s CreditVisible tier; and streamlining integrations with existing bank apps with customer logins.
One pro to CreditVisible being a new company is that we can start from a microservices-based architecture and scale up from there while other competitors with long-established monolithic architectures will run into challenges to shift to a microservices set up because it will require a phased approach to dismantling its monolithic components. Banks that integrate with CreditVisible will see opportunities to enter new markets, new revenue sources, and enable growth.
Open Banking
The U.S. will likely follow the United Kingdom’s adoption of open banking if issues such as data security and privacy are addressed effectively. Open banking will streamline the ability for fintech companies like CreditVisible to compete with legacy financial institutions while lowering costs for consumers using financial services.
Through open application programming interfaces (APIs) that aggregate and authenticate data, consumers will find more transparency with their financial snapshot while benefiting from more secure methods of data-sharing rather than the less-secure methods of screen scraping.
Pros of open API:
- Available for use by external developers, putting power in their hands and reducing workload on internal CreditVisible developers; can essentially increase revenue without a heavy lift.
- Makes business and its information more widely available, which could be an asset for CreditVisible as we set out to transform the financial wellness and credit entry industry.
Cons of open API:
- By opening back end information, security and data privacy can be compromised.
- CreditVisible will lose control of the end users’ experience
- Little control over the branding.
Data privacy and security is a top priority for CreditVisible. To balance the need for data privacy for our end users and the company vision to transform the financial industry, we will create an open API to follow the open banking trends, only after a thorough risk assessment and API contract is drafted. While there are no standardized regulations in the open banking space, CreditVisible will be among the fintechs pioneering this new approach and setting the industry standard for protecting consumer privacy.
The API contract will address the most common risks, including unauthorized transactions, misuse or exposure of customer data, and reputational damage caused by third-party or partner action that is deemed inappropriate. Our developer team will ensure APIs are available and effective in sending information back and forth between our product and the app or website of our bank clients.
Data Ownership
The foundation of open banking is that you own your own data that you generate; therefore, you have the power to give permission to banks to share your data with other third parties.
Regulatory Framework
This requires a more centralized model framework and a comprehensive legal landscape as the Consumer Financial Protection Bureau (CFPB) works to collect input from stakeholders in the rulemaking process as well as working with other federal regulatory agencies such as Federal Trade Commission (FTC), Federal Reserve, etc. The General Data Protection Regulation (GDPR) and the Payment Services Directive (PSD2) force companies in Europe to comply with strict regulations. While the U.S. does not have such strict regulations in place nationwide that require open banking, U.S. banks and fintech companies can adopt best practices developed by regulators and policy makers to drive the industry standard.
What Does Gen Z Want From Financial Services?
Open banking is the future, and CreditVisible will prepare to lean into this approach. Attitudes in the U.S. are mixed. Research showed one in five consumers find open banking valuable; however, Gen Z and millennials showed higher interest.
Younger consumers want flexibility, transparency, less complex financial management overall. One survey respondent said “It’s an interesting idea that a lot of people could probably use to aggregate their financial information into an overall big picture to assess where they stand.” 18% of 18-21 year old respondents are willing to share financial information safely, 17% of 22-36 year olds, and that percentage decreases with older age groups.
Consumers will be empowered with more data ownership, transparency and a more holistic view of their financial state. Open banking means your data is portable and can be taken to another financial institution far more easily, which will create more competition in the financial industry and result in lower service costs for consumers. Data portability is important to CreditVisible’s target audience because research showed 60% of Gen Z will switch financial services providers if they feel like their social goals were misaligned.
Open banking is the future of the financial industry, and the audience that is most ready for this open data revolution is Generation Z. However, this generation still has some major concerns that any bank or fintech company must address in order to win over their trust.
As digital natives, Gen Z recognizes the importance of data security, Financial companies need to stay true to the values of open banking and must be able to communicate those values are being followed clearly to their customers.
Younger consumers are engaged with their finances. 70% of Gen Z check their finances daily and more than 90% have access to them via smart phones. Companies need to launch digital experiences that work to offer valuable financial insights at the tap of a finger.
- 68% are interested in opening an account solely online – the most out of any generation
- 60% are keen to speak to support via an app
Experian found traditional banks only accounted for 28% of lending by younger consumers, with fintech accounting for 40%. Yet, research by HubSpot shows 61% still begin with the bank their parents used, so perhaps, there might still be time to salvage the relationship.
How to Engage with Gen Z
Gen Z turns to Tik Tok for advice or “FinTok.” The hashtag #personalfinance alone has racked up over 4.4bn views.
Competitors
Bank of America’s pay by bank transactions by leveraging open banking to allow users (in the UK) to pay directly from their bank account. Because the payment process is done within an account-to-account online payment, companies don’t need to obtain and store customer card data. This enhances security and creates a cost-effective solution by not incurring card processing fees. All of this is made possible by leveraging the customer’s bank authentication network.
Credit Karma uses a tool that their own users designed named Mimic. Mimic replaces service dependencies for their company and can read a service definition and automatically generate a response. Mimic is a set of NPM libraries, a CLI tool, and a desktop application built around the idea of faking a real service by implementing its contract. Mimic also incorporates the use of Thrift and GraphQL. Thrift is a software framework that provides scalable cross-language services development and combines a software stack with a code generation engine to build services that work efficiently and seamlessly between different platforms and languages. GraphQL is a program that gives clients exactly the data they request, this helps APIs become fast and developer friendly.