Open Banking takeup key to market share
Written by Peter Walker
Banks that commit quickest to Open Banking practices will win the most market share, according to a panel of experts.
MIT Technology Review Insights, in association with Oracle Financial Services, interviewed senior executives directly involved with Open Banking from institutions including Citi, HSBC, ANZ, Standard Chartered Bank, BBVA and Sumitomo Mitsui Financial Group.
While many banks are still developing strategies, launching Application Programming Interfaces (APIs) and monitoring competitor activity, the overarching sentiment from the panel indicated that those banks or FinTechs that are able to move quickly and develop a long-term strategy stand to profit.
HSBC’s head of innovation and strategic investment Frank Tong said: “Not reacting rapidly enough to Open Banking could result in another party, either a competitor bank or FinTech, innovating more quickly and eroding trust or relationships.”
Interviewees also noted that regulators are brokering Open Banking innovation through collaboration with banks to develop the frameworks needed to move forward, not only in progressive markets like the UK and Singapore, but around the world.
Claire Beatty, editor for MIT Technology Review Insights, said: “We’re seeing a strong collaboration between governments, regulators, incumbent players and FinTechs to ensure the right framework is developed to give customers greater control over their data and provide a more seamless financial services user experience.”
FinTechs’ ability to quickly deploy services, and consumers’ ever heightening expectations for convenience, have forced traditional banks to embrace Open Banking and build smarter, more relevant digital experiences at every point of the customer lifecycle, according to the report.
Sonny Singh, senior vice president and general manager of Oracle Financial Services, argued that Open Banking is no longer an option, but an inevitable reality. “Banks that tap into an expanding ecosystem of potential digital partners, embrace APIs and leverage cloud-ready solutions, will get ahead in the race to efficiently deliver a broad range of financial products and services to their customers.”