The momentum of open banking has constantly been rising with more banks and Fintech businesses embracing the opportunity. According to a survey conducted by Accenture, “More than 90% of banks in the survey see open banking as a key strategic initiative in their digital transformation. Also, more than 85% of banks have already invested in open banking initiatives or planning to do so in 2019.”
Considering the importance of data in this age of digital disruption, it could be rightly said that open banking is set to add value in the banking and finance sector by putting customers more in control. This fusion of data and technology has the potential to change banking for people like never before.
Open banking could pave the way to a plethora of financial services that might enable innovative changes for business, consumers, and society.
How do we begin to embrace open banking?
While making a move towards embracing open banking, businesses need to shift from traditional processes to the more technology-driven ones. Adding value through digital services could be key for your business to sustain in the new world of open banking. To ensure your business is prepared for this new landscape, we have identified four strategic actions that you must adapt to prosper your business –
- Identify customer needs for personalized services
- Be secure and trustworthy
- Impart the knowledge of open banking
- Develop digital strategies to generate revenue
Identify customer needs for personalized services
People and their needs regarding banking and finance are constantly changing. They need their banking to be easy, convenient, transparent and less expensive, all at the same time. Keeping on top of what customers want is clearly essential for banks and businesses in the open banking environment.
Digital transformation has boosted the volume of user data. Sharing financial data through secured APIs could allow businesses to assess transaction history, debit/credit details and purchasing requirements of users. Analyzing that businesses can identify what the users want in terms of banking and offer more personalized financial services.
Be secure and trustworthy
At the heart of open banking, there is a great requirement for better security of customer data. Open banking poses numerous business opportunities in terms of offering financial services; however, the question remains, “How do I reassure my customers that their data is in safe and responsible hands?”
Business models that are safe and trustworthy are more likely to succeed in this open environment. Being transparent about how the data is collected, sorted, and processed will help your business to gain trust.
Impart the knowledge of open banking
According to a survey conducted by Splendid Unlimited, “Four out of five people haven’t heard of open banking as a concept.” Although the survey was conducted last year in the month of November, the number doesn’t seem inspiring. This becomes an opportunity for you to help your customers understand about the benefits of open banking. Also, how sharing their financial data can help them consume better value products and services.
Develop digital strategies to generate revenue
Open banking is technology-driven. It is about sharing user data through secured APIs to build innovative financial services. It’s also about new possibilities to create an ecosystem centered on the consumer. In the world of open banking, the value is created from sharing and leveraging user data through APIs and building services with the help of technology.
Businesses looking to leverage open banking for new ways of revenue generation must adopt digital strategies for better outcomes.
The future will be open
More and more banks are adopting digital strategies. AI and Big Data are everywhere. It seems impossible for any progressive business in the finance sector to grow without needing technology. Data is now a currency, and that regulations like PSD2 allow data being open, businesses can reshape the banking services with technology and generate huge revenue.
Technology is evolving, and it is hard to predict the future of financial services. But with a technology-driven approach, businesses can always leverage opportunities the market poses. Digitalization could give businesses a much-needed boost to sustain and achieve goals in this dynamic environment.