Victor Trokoudes, CEO & Co-Founder, Plum
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?
In the short term, it will be harder for TPPs like Plum to deal with the transition to open APIs. Long term, once the transition period is over, it will make integrating with banks/aggregators much smoother.
Banks have been purposely vague about the true costs of operations, and guarded customer data instead of using it in a way that benefits them. Most banks in the UK had clauses in their T&Cs preventing data sharing. Open banking means open competition, and it will hopefully bring full transparency and new providers to add real value to the traditional platform. Providers who embrace transparency and bring added value to customers will end up winning the day, and they will likely not be those leading today.
Which activities should banks be prioritising in the wake of open banking?
Banks should prioritise testing APIs and connecting with AISPs/PISPs to start testing necessary functionalities. Development does not end once APIs are ‘ready for market’, and there will be a long transition period when consumers will still pose questions and push the standards of the technology. Testing and retesting is key.
What opportunities does Open Banking present, and which commercial strategies will thrive in the new environment?
Open Banking will allow consumers to assess the value they get and change providers should they need to. The ability to compare providers will lead to intensified competition, as only 4% of consumers change banks in a year now. Open Banking will make it easier to use multiple banks and services harmoniously, and will result in combining products and providers based on best fit. Strategies underpinned by a great customer experience will thrive.
How can firms overcome security and privacy concerns associated with data sharing?
Open Banking has been designed to facilitate safe data sharing. The culture of not sharing details is not synonymous with safety, but with banks retaining ownership of data rather than giving it to consumers.
All privacy measures are already in place; it’s now just a case of raising awareness. Concentrated efforts on long-term benefits are necessary, along with making legacy technology more transparent. New programmes such as SCA (strong authentication), requiring two forms of authentication to give consent, and positive consent to prevent consumers from being auto-opted in without their knowledge, will help to ease concerns. Once APIs are fully live, users will be able to check on the FCA register which companies have access to their data as well.
Although Open Banking may not be an overnight revolution, the conversation to change the way we bank has begun. There may be some initial hesitancy, but through educating consumers on the long-term benefits, we don’t expect this to last. For the first time, people will have full control over their own data.
What are the best strategies to encourage customer engagement?
Plum has a hugely engaged user base and online community. Here are some ways we engage and build relationship:
- Conversation. We are always chatting to our users as a chatbot, keeping our communications as human as possible This puts us in position to get almost immediate user feedback both on specific products, and to catch up on their experience.
- Cultivating the community by creating a culture of collaboration and friendly help. We lead and join in on threads, and are proactive in solving problems. Our users have a real hand in how products develop by voting in polls and joining private slack channels with the team.
- Making sure the conversation is not always sell sell sell. No-one wants to be friends with someone who only talks about themselves. We noticed some of our users having emoji battles with plum, and decided to announce a gif battle showdown on our main public page to engage with the community in a way they enjoyed. We had over 200 comments in the first hour.
- Provide the option to be as involved as much or as little as they like to avoid over communication. We have different levels of relationships with our users, and that depth is always in their full control.
- Show appreciation. We are constantly reminding our users how much we value them, and put them centre stage with user profiles and testimonials.
- Do not only focus on positive relationships. Some of our most productive feedback comes from negative comments. We never shy away from any questions, adding authenticity and trust to our relationships. Retaining professional, friendly communication even with naysayers acts as evidence for those values and creates a more authentic brand image.
Open Banking Summit
25 April 2018 London
Victor Troukoudes 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.
CONTACT US to secure your place