Open Banking requires banks to share data and, in theory, allows FinTechs / innovators to make products that connect to every bank and be used by any customer.
It’s interesting that 12 other countries are publicly working on plans for their own versions of Open Banking.
There is also consideration for apps that can automatically move customers’ money between accounts without needing to ask for permission each time.
As you can imagine, this has alarmed executives that may have benefited from customer apathy that leads them to leave money in low-interest accounts.
We have done a lot of analysis on Open Banking (including our latest blog here), but personally I think this it will lead to three new trends in banking:
- Creation of true customer value – products that are more tailored to individual customer requirements
- Customers being able to manage several accounts seamlessly via an app and therefore having less loyalty to a single bank to manage all their accounts
- Increased customer-centricity – the customer experience both online and offline will greatly improve
Recent commentary has revolved around the fact Open Banking hasn't necessarily brought the immediate change some had imagined, but Rome wasn't built in a day!
When British banks were forced to open up their customer data to rival lenders and digital upstarts a year ago, would-be innovators promised a flood of new products that would herald the biggest shake-up in retail banking for decades. Twelve months on, and even those behind the new regime acknowledge the predicted deluge has so far been more of a trickle.