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Ever since the ancient Romans were storing their coins and jewels in temples to whom they paid a fee for secure storage, what citizens need from their banks has grown in complexity. So, too, has what banks and financial institutions are able to provide. One of the latest innovations revolutionizing the world of finance and banking is multibanking.
In this blog post, we’re going to discuss multibanking: what it is, how you can use it, and who offers it.
To understand multibanking, it’s important we first define ‘open banking’. This is because multibanking is an innovation made possible by open banking, which is a broader subset of financial innovations and changes in the last few years.
Open banking uses application programming interfaces (APIs, basically just the technology used to run apps on your phone) to allow third-party financial institutions access to financial data from banks and other financial institutions.
Basically, open banking has allowed other service providers access to customer banking data, so they can benefit from a wide array of services including:
And plenty more. Open banking has itself been made possible by the advent of digital technology and digital banking.
With this revolutionary financial technology came the feature of multibanking. Prior to this feature, because banks and financial institutions were fairly rigid in their offerings to customers, users would often have to open accounts with different banks. They would open a checking account in one, an investment account in another, and so on. The result was chaotic and messy, and required paying fees to several banks and shouldering multiple interest fees.
Thanks to the increased allowance of access to data, financial services could begin to offer multiple services on one interface. This enabled customers, both individuals and business owners, to manage all their finances from one platform, reaping the benefits of a simplicity and complexity like never before.
Multibanking offers important and useful features for customers, whether they be business owners, entrepreneurs, or just individuals with personal banking accounts.
Let’s go over the features so you know what you’re getting.
Multibanking platforms allow users to make several accounts. This is ideal for self-employed workers and business owners who need to separate personal and business finances. Two accounts in this way allows you to better organize yourself financially, while running your business more efficiently.
Traditional banking transfers have been rigid and lacked the versatility that today’s financial and global landscape requires. Multibanking allows for international transfers, direct debits, transfers to multiple receivers, and much more to suit the complex needs of today.
Thanks to open banking and digital technology, multibanking can meet the demands of an increasingly international market. Multibanking provides a simple solution to this demand by allowing international transfers in a variety of currencies—a feature available from the interface.
The above features lead to a whole host of advantages. Let’s go over the ways in which multibanking will benefit you directly.
Prior to open banking, your financial institution could keep a lot of financial information from you, about your rates and the potentialities of your account. Now, the feature of multibanking demonstrates all of the possibilities you have with your account, and you have much more access to your financial information than ever before.
Most multibanking services are digital and online, meaning you can do everything from your phone. Gone are the days of needing to travel to the local bank branch and deal with representatives, make appointments, and take up time in your day. You now have everything you need, including customer service, on the app you can access in an instant.
Versatility is exactly what was missing from banking and financial services until open banking came and changed everything. Instead of just a secure place to make deposits, your bank account now has the potential to be an investment portfolio, team management account, personal and business banking account, and much more.
Multibanking services use the highest security standards for digital finance technology, keeping users safe from fraud. Here at Qonto we use 3D-Secure login technology, which requires users to verify their identity on two separate apps. This significantly reduces the possibility of someone making transfers from your account.
This question takes us back to open banking, as multibanking uses open banking technology and therefore its security standards. As mentioned above, most multibanking services will use high level digital security standards and verification methods to ensure you are the one using the app.
Open banking uses API technology, which is a proven safe technology used broadly in the digital economy. API provides secure cross border connections between customer’s accounts, and ensures that customers never need to share their credentials. Instead, you simply authenticate directly with your bank or financial service via the API.
With open banking, customers are more in control of their data. The interfaces allow for clear access and control, while privacy agreements allow customers to choose how much of their data and information is shared.
Multibanking costs depend on the platform and service you choose. Most likely, you’ll pay a monthly fee for certain services, and increasing the fee will give you more access and features. Certain features which can be increased by paying higher subscription fees include:
Proliferation of digital technology has allowed a number of different financial services to appear, offering services that suit customers depending on their needs. Let’s go over the basics of five multibanking platforms available in Germany today.
