New research into Open Banking implementation has found that financial institutions have struggled to recruit engineering talent for projects, with many lacking enough personnel and the necessary skillsets to stay or become compliant.

LM Research & Marketing Consultancy conducted an online survey on behalf of Fiserv between August and September among 400 respondents in the UK, Poland, France and Australia, with 100 respondents from each country. Respondents represented retail banks of asset values from less than $250 million to more than $300 billion.

Only eight per cent of respondents yet to implement Open Banking agreed they have enough people and the right skill sets to become compliant. In Australia, no respondents said they have enough people and the necessary skill sets, and 44 per cent said they have neither enough people nor the skill sets.

Fiserv found that banks are united in the belief that Open Banking will have an impact on financial activities, with 67 per cent expecting at least a moderate impact, and 27 per cent of those saying new regulations will completely change how customers manage their finances and interact with banks.

The research showed that banks have primarily focused on compliance, with only 42 per cent - and just 24 per cent in Australia - of respondents saying their strategy goes beyond day one.

The majority of respondents from banks in Europe with $300 billion or more in assets reported that they had already implemented Open Banking projects. In Australia, where the largest banks are required to adopt open banking by July 2019, banks plan to implement beginning in the first half of the year.

There were also indications that banks are eyeing the strategic opportunities associated with Open Banking. Integrating with third-party services (38 per cent), defending against transaction fees (38 per cent) and maintaining customer relationships (36 per cent) were the most common components of respondents’ strategies.

Smaller, but still notable, percentages of banks view opening their Application Programming Interfaces (APIs) as an opportunity to improve customer service (21 per cent) or facilitate access to new services for customers (16 per cent).

Only 13 per cent of those that have already implemented the changes said they are happy with the way things went and would do nothing differently. Many others said they would have relied more on outsourcing, with 46 per cent saying they would outsource third-party provider life-cycle management, and 23 per cent saying they would outsource the complete operation. Only 11 per cent said they would have built and maintained everything in house.

“As Open Banking initiatives are being initiated around the globe, banks are beginning to look beyond compliance toward more strategic priorities including expanding solution capabilities and improving customer service,” said Nick White, vice president, product and marketing for EMEA at Fiserv.

“With many banks stating that they lack personnel and skill sets, outsourcing of Open Banking technology development and maintenance may become more common as banks look to become and remain compliant as well as capitalise on the opportunities.”

Share Story: