06. 26. 2018
Open banking is still a sci-fi vision to bankers – W.UP Digital Banking Weekly
The way many financial institutions react to open banking still falls short of what open banking could do for them. And that makes them ever more vulnerable to snowballing disruption and competition. Putting off core system changes carries similar risks.
Open banking: a wind of change
Make no mistake, the implications and potential applications of open banking are not part of a grand sci-fi fantasy. They are very much the present, said Starling Bank, Bud and TechUK in a recent podcast.
Banks’ current compliance-driven reaction to open banking means that compliance teams are busy meeting minimum regulatory requirements and getting their IT team to build compliant APIs. But they seem to be missing the point: this falls “short of what Open Banking enables and puts incumbents at risk of disruption by new players”.
Digitalise to personalise
The recipe for winning trust for personalised services requiring access to customer’s highly personal information is making sure that it’s clear what they get in return, explains David Donovan from Publicis.Sapient.
And that’s where digital intelligence platforms come in. By gaining insights into individual customer needs and behaviours, companies can “unify marketing, creative, data, technology and operations” to offer contextual services that take personal needs into account throughout the customer journey. A clear win-win.
If it ain’t broke, don’t fix it?
Does it really matter how old core systems are if they still work? The hard truth, according to Chris Skinner, is that no “silo-based, product-focused, fifty-year-old, batch-based system” can be fit-for-purpose in the age of customer-intelligent marketing and service.
But that doesn’t mean organizations should jump the gun. Instead of a complete systems swap-out overnight, they should take a bite-by-bite approach, “one process, one product, one function at a time”.
Record number of UK bank branches slam their door shut
On average, 60 bank branches are shutting down a month in the UK, according to consumer group Which?. As many as 2,868 branches will have closed between 2015 and the end of 2018. And the trend shows no sign of slowing down.
What’s going on in Blighty, you ask? The Royal Bank of Scotland (RBS) told the BBC that since 2014 the number of customers using their branches across the UK has dipped by 40%, while mobile transactions have grown by 73%. “As customers continue to change the way they bank with us, we must change the way we serve them, so we are investing in our branches and re-shaping our network, replacing traditional bricks and mortar branches with alternative ways to bank.”