Open Banking can create groundbreaking shifts in banks’ business models, more innovation and better customer experience. But how quickly are changes taking hold? Where are banks’ focus areas? What role is regulation playing? And what impact has the Coronavirus pandemic had?
Temenos and the Economist Intelligence Unit have sought the answers to these questions and more in a new report: Open Banking: Revolution or Evolution? This incorporates data from over 300 global banking executives, half of whom are C-suite.
- 45% of global banking executives want to transform their business model into ‘true digital ecosystems’. This means offering their own and third-party products and services to customers, as well as embedding their offerings on partners’ platforms.
- 32% see leveraging their own data for better personalization as a top priority for Open Banking.
- Regulation has been the main driver of Open Banking in Europe and some Asian and Latin American countries. In others, like the US and China, it has been driven by market forces and new competitors such as the big techs.
- The Covid-19 pandemic has boosted Open Banking and the financial technology ecosystem and incumbent banks could be the biggest beneficiaries, providing that they adopt adequate technology strategies to compete with nimble new entrants.
The report concludes that Open Banking depends on customer confidence. That means allowing them to share their data confidently, as well as demonstrating interoperability, enhanced user experiences, and added-value of products and services.