The term bank statement has been used for a very long time and has been part of the financial industry for a very long time. Banks began issuing statements to their customers as early as the 1800s. A bank statement is a list of all the financial transactions that have taken place in the customer's bank account.
Bank statements can help people keep track of their money, identify errors, and recognize spending habits. People should verify their bank account on a regular basis—either daily, weekly, or monthly—to ensure their records match the bank’s records.
Paperless bank account statements, and how are they used to qualify future financial applications - We are all aware of the advantages of going green, yet the only and major concern is the rising cost of living. Is there any way to reduce the cost of living without compromising the environmental safety? Going paperless is a sure way to help achieve this. In the modern world going "paperless" is possible if we are able to obtain paperless bank account statements.
Are paperless bank account statements replacing the traditional paper method? If yes, how?
Why do applicants need to present bank statements?
An account with bank statement is a document that summarizes all products and services purchased by customers over a specific period (can be monthly, quarterly, annually, or another agreed period). The bank statement account also includes a summary of invoices sent; payments received deposit and additional account-maintenance costs that can be gained through paper statement in the mail.
That means the report can provide information ranging from administrative costs, checking account, deposits, transaction, account balance to interest earned each month. Just imagine how much user-related insights can be gleaned from what that bank statements contain. Assuming you want to apply for a loan as a customer, an account statement is one of the data points used to assess the customer's ability as a borrower and determine whether their loan is getting accepted or canceled.
How can financial institutions obtain your transaction data?
Since it contains sensitive personal information about the customer, third parties must contact the account owner to obtain it, whether through the mail (electronic statement) or receiving your statement directly from the nearest office. The account holder then collects their official bank statement and sends it to them.
However, open banking APIs can help make this procedure simpler. Open banking securely shares financial information except for account information electronically with the customer's permission, the statement includes. So that financial data owned by financial institutions, such as official paper bank statements, and statement date, can be shared.
Open banking is a new channel that securely lets customers share their banking information with third parties. Then, these third parties can use the data to create new financial products and services better suited to customers' specific financial situations. You can withdrawal your received paper statements safely with third parties when you get a bank statements electronically (e-statement).
How do open banking APIs speed up online banking adoption?
At first glance, open banking APIs seem to only benefit third parties who receive banking data available online through pairing. However, a closer look reveals that this banking innovation also provides benefits to customers, including:
Better financial data management
Although open banking allows for greater transparency statements for at least many banks, it does not compromise customer security or privacy such as their account number, account type, debit transaction, statements online, etc. Third parties, banks, and APIs will employ stringent security measures to encrypt and safeguard sensitive data, as informed in their financial institution's websites. Customers will have more control over their financial data, including physical account statements, online statements or paperless statements, as a result. Also by using open banking API, the banks will reduce the transaction discrepancies and prevent fraud.
Improve banking service
In countries like Japan, people are expected to keep track of their own deposits, withdrawals, and balances using their own passbooks at ATMs. Banks there simply do not send bank statements to customers. There is no tradition of mailing statements in these countries.
With open banking, it allows third parties to access bank's information, banks may choose to improve their services through frequently asked questions. Banks can compete with better open banking APIs and transparent and competitive pricing instead of allowing someone else to control customer data and know the period covered by the statement.
Simplified banking procedures
Some traditional banking statement period procedures require lengthy and very time-consuming stages until the statements are available. One of the examples you'll see is the loan application procedure. Customers must manually collect and send banking reports from various sources to potential lenders that might charge a fee. Lenders can eventually access your checking and savings accounts through open banking APIs to assess your credit score.
A bank statement may required for accessing financial services, for example when applying for a loan, which is mostly provided by third parties other than the bank. To quicken the process, open banking establishes a secure channel through which ccount statement holders can provide information to third parties. Customers, banks, and third parties can benefit from the information displayed on the account statement by going paperless.
Now you can enjoy the convenience of open banking through Ayoconnect Open API, a computing system that allows service providers to collaborate on mutually beneficial solutions for businesses and consumers. With open banking innovation, securely sharing information from account statements is now easier.
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