Pablo Ruiz Correa, Head of Innovation, Liberbank
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?
Because of PSD2, we have started to develop APIs as the first step to compliance and implementation of Open Banking. We are moving our Open Banking strategy toward monetisation within each vertical, starting with payments and moving into lending and investments. Strategic alliances are a large component of our transition as well, as fintechs can complement our existing platform and enable us to become more agile. Fintechs are currently connecting to our platform through screen scraping, but it is just a matter of time before competitive banks will all have open access to data, forcing innovation and alliances between those banks and third parties. We’re moving to a much more open, collaborative market, and those who are proactive in their compliance and see Open Banking as an opportunity will end up ahead.
Which activities should banks be prioritising in the wake of open banking?
The development of APIs and interconnection between your platform and third parties should be the top priority. Implementing your sandbox to publish APIs for third party developers is a great first step to begin collaboration and getting your technology and platform ready for PSD2.
What opportunities does Open Banking present, and which commercial strategies will thrive in the new environment?
PSD2 may just be a payments directive, but it has the potential to impact all the business you do as a platform. We see huge opportunities in lending, as many third party providers are already offering lending as a service, giving banks the chance to further develop their business in the lending space. This is just the beginning of the opportunities that will come from collaboration though, as banks have the capacity to hold deposits, and fintechs are able to offer specialised services. Banks build and hold the client relationship, while fintechs develop niche, targeted services to benefit the user experience.
How can firms overcome the security and privacy concerns associated with data sharing?
There needs to be a developed awareness around who consumers are providing their data and identity information to, as not all third parties have the same security protections as banks and other financial entities. This education falls on the banks, as their clients are facing the biggest risks in delegating access of their data to third parties. The regulators have done quite a bit of work on RTS and other security guidelines, but as these are still in development, we’ll just have to see what a more robust authentication system may look like, and how universal identity standards may be implemented.
What are the best strategies to encourage customer engagement?
We have done extensive work in communicating the new regulations to our clients to make them aware of the benefits and risks. They are now in control of their own information, so a real understanding is what will drive engagement.
Why will you be speaking at Finance Edge’s Open Banking Summit, and what do you hope to get out of the event?
There are not many Open Banking events that exist, so this is a great opportunity to connect with other colleagues, hear their lessons learned, and share our vision and concerns coming from Open Banking and PSD2. We are already seeing the momentum in the industry, and I’d like to hear what my peers think is coming next.
Pablo Ruiz 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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