Capitalize on Open Banking Trends

Navigator Edition: October / November 2017
By: Alan McIntyre, Jeremy Light, and Luca Gagliardi

Open Banking offers a new way for banks to be digitally strong—by boosting the customer experience and creating new revenue streams. Yet, depending on how banks address it, Open Banking can either lead to enormous opportunity or pose a huge threat.

Slightly more than half of the 100 payments executives at large banks polled in the Accenture Open Banking Pulse Survey see Open Banking as a way to distinguish their bank from traditional competitors, and compete with fintech and GAFA. Generating the most value from Open Banking initiatives, however, requires banks to go beyond simply satisfying compliance, as deadlines on Open Banking regulations like the Revised Payments Service Directive (PSD2) loom large. Survey findings suggest two key strategies banks should take away to optimize their investments.

1.  OPEN BANKING AS A STRATEGIC PRIORITY – Position Open Banking initiatives as strategic priorities to create new revenue streams, lower costs and improve customer experience.

  • 60% of North American banks already do; 74% for European banks.
  • 69% of banks see the business case for investing in Open Banking as attractive.
  • 71% of banks believe Open Banking can help to reduce time-to-market and application-delivery costs.
  • 71% of banks believe Open Banking can ease customer access to banking products.

Done right, Open Banking can help banks innovate in ways that position them to compete with today’s digital giants and grow their business among a wider set of consumers.

2. DATA AS A NEW DIGITAL BUSINESS – Treat data as a new digital business and monetize it.

  • 68% of banks would consider investing in data monetization to launch Open Banking-related initiatives.
  • Counteract PSD2’s double-edged dilemma—more interfaces via APIs that can return more data, but potentially increase data risks—by exceeding PSD2’s security provisions (such as authentication features) that offer enhanced customer protection against fraud, stringent liability and accountability.
  • Extend API development beyond the minimum requirements by creating standing orders and direct-debit mandates, or completing product applications via API. In doing so, banks can monetize such additional APIs and collaborate with third parties to create new products and services.

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