Olly Betts, Co-Founder and CEO, OpenWrks
How will the increased use of open APIs shape the financial services market, and how will it impact different market players in both the short- and long-term?
Open APIs are the biggest innovation in the financial services market since the formation of the credit bureaus. The impact will be felt in every corner of the market with the potential to transform the whole financial services ecosystem, but only where participants focus on leveraging open APIs to improve people’s everyday lives. In the short term, the focus has to be on delivering benefit to customers by improving existing experiences, rather than creating new ones. At OpenWrks we make Open Banking work by helping people share their financial information securely with the businesses they trust. So that those businesses can deliver better products and services to their customers, for example, faster mortgage applications, better access to credit for people with thin credit files and more compliant income and expenditure assessments . In the long term, open APIs have the potential to change our relationship with money and how we spend it. The winners will embrace Open Banking to better understand their customers and deliver more personalised solutions. Shaping their products and services around their customers’ needs rather than around business models.
Which activities should banks be prioritising in the wake of open banking?
Firstly and most importantly, banks need to be compliant with PSD2 regulations, ensuring that they have a dedicated interface for third parties that enables people to connect their bank account and authorise consent to share information or make payments with trusted and regulated third parties. Despite great efforts from many of the banks to meet the Open Banking deadline, we are very much at version 1.0 and continued investment from banks and collaboration with TPPs is required to deliver a standard that will drive the user benefits that we all want to see. Secondly, banks need to be figuring out how they’re going to start using the data and payments capability they’ve had for hundreds of years to actually deliver better end to end customer experiences that are digital, convenient and deliver incremental value to their customers.
What opportunities does Open Banking present, and which commercial strategies will thrive in the new environment?
The potential opportunities created by Open Banking are endless and I believe winners will put their commercial strategy secondary to delivering value to their customers. Many banks and businesses are focussing on Open Banking driven marketplaces – owning the open banking app store – and generating revenue from connecting customers to third party products but without providing the brilliant product through which people access the marketplace – think iPhone – I cannot see this business model being sustainable. Open Banking finally gives control to the customer, so the commercial strategies that will stand the test of time will give a clear value exchange for the data shared by customers, delivering genuine value to customers that meet the ever-changing customer demands of convenience, personalisation and frictionless end to end experiences – think Uber leveraging Google Maps API.
How can firms overcome the security and privacy concerns associated with data sharing?
By putting data privacy first and being prepared for failure. To build trust, there needs to be clear and radical transparency regarding what information will be shared, with who and the benefits people will receive in return. Everyone is responsible for increasing the general awareness of how to protect personal data and the very real threat that cybercrime represents. We need to be transparent with customers about the risks of data sharing, how these are mitigated and what they can do to protect their information. We must all be prepared and plan for failure. There will be a leak in the system and how companies respond and communicate with any customers impacted is essential to the success of the open banking ecosystem.
What are the best strategies to encourage customer engagement?
I’ve said it before and I’ll say it again. Radical transparency and clarity on the value exchange. People won’t opt into Open Banking. They’ll opt into a faster mortgage application, a better loan rate, an easier way to save money and a way to make more from their savings.
Why will you be speaking at Finance Edge’s Open Banking Summit, and what do you hope to get out of the event?
OpenWrks is at the cutting edge of Open Banking. We’re helping our clients use Open Banking in their businesses today to deliver real value to their customers and we want to share what we’ve learned with others. I’m also looking to hear the very latest insights from the people alongside OpenWrks at the cutting edge of the market. Their views of early customer adoption and an understanding whether incumbents are seeing Open Banking as an opportunity or a threat. Most importantly I am looking forward to being amongst like-minded people, thought leaders and influencers to continue making Open Banking a success through collaboration and ultimately ensuring it improves people’s everyday lives.
Olly Betts will be joining us for the Open Banking Summit. This high-level, interactive forum will bring together senior-level professionals from all corners of the open banking space.
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