The Open Banking deadline in January 2018 is a catalyst for a fundamental shift in financial services. Beyond the obvious increase in third parties providing financial capabilities, we’ll see an acceleration of the digitisation of financial services, and we’ll see financial service providers – including banks – partnering and building in ways they have not before.
Compliance with PSD2 is a check in the box for many banks, but as the regulation comes into effect we’ll see more banks considering how they can leverage this as an opportunity as they begin to craft business cases and understand consumer demand.
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Driven by consumer expectations for speed, ease and convenience, a much broader range of financial services will become ‘digital’ beyond the current offerings there are today – you can already see that starting to happen.
Established institutions and challengers alike are being relatively vocal about future strategy.
Open Banking will bring a tidal wave of data, leading to more actionable insights for consumers and a smarter, more relevant approach to lending, to name just two opportunities.
Banks that have always operated in a certain way are going to need to think differently to build relationships with customers in this new landscape. Many banks have strong technical capabilities, and forward-looking banks will seek to offer greater access to services in more flexible ways that fit the ways consumers live their lives.
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By GlobalDataWe’ll see banks employing more agile technology platforms, deploying services in the cloud and looking to partner to increase their competitiveness. Partnerships with emerging fintechs will begin to crystallise, and I expect we will see more banks investing in and supporting new innovations to get into production at a faster pace.
Banks that find the right partners and deliver differentiated capabilities and experiences are the ones who will get ahead of the game.
We’ll also see a continued focus on fraud and risk management, with banks looking to “wrap” their digital environments in virtual security blankets and verify that other players connected to the open banking ecosystem are not a weak link in overall security.
Andrew Steadman is VP, Product Management & Marketing at Fiserv
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