How to successfully handle Open Banking

With the immiment arrival of Open Banking, we talk to Daniel Kjellen, CEO of Tink about the changes and opportunities that this will bring

Some banks are naturally apprehensive about how to handle the new Open Banking regulations, and how the rules will impact them. As a company whose main focus is the opportunities around open data, what would you recommend to businesses who are unsure of their next step?

Open Banking is coming, and the smart banks aren’t wasting time being pessimistic about PSD2 – they’re thinking about what it means and the doors it will open. By leveraging the first mover advantage, banks and financial service providers can ensure that they reap the benefits that come from Open Banking. If companies fail to adopt aggregation and product recommendations first, they run the risk of losing customers to other banks, where they can get better deals or superior customer experience. Those companies that are dragging their heels may see the extra time they’ve been given as a benefit, but the longer they spend on the starting blocks, the further behind they will fall in the long run.

What changes in customer service and experience can consumers expect once banks embrace the legal changes?

PSD2 will revolutionise the way consumers manage their money. Open Banking will dismantle the barriers to switching banks and comparing different products on the market, making it one of the most exciting things to happen in the financial sector. Consumers can expect their banks to have a much more detailed understanding of their finances, which is important when negotiating rates and deciding on financial products. This understanding will lead to smoother processes for consumers as well as personalised insights. On top of this, personal finance management (PFM) apps will be able to offer recommendations that are much more aligned with a consumer’s financial choices due to the wealth of data they will be able to gather.

However, one of the things banks and financial service providers need to ensure is that these benefits are being clearly communicated to their customers. Open Banking is designed to make consumers’ lives easier, but the media is talking openly about widespread mistrust of the initiative. Customers need to know exactly what data will be handled, by who, and for what, if they’re to be expected to embrace the moves. Realistically the best people to discuss this with are the banks they’ve chosen to hold an account with, so banks need to take responsibility for keeping their customers informed.

What positive opportunities will there be for the banks who are more open with their data? What are the risks for those who do not embrace Open Banking?

Using data to understand consumers and offer bespoke recommendations for their finances will establish more customer loyalty. Banks will have the opportunity to provide tailormade platforms for consumers, leading to better customer experience and, ultimately, satisfaction. In addition to this, data aggregation will enable banks to build products and experiences that remove friction from on-boarding flows, as well as simplifying and automating the getting-to-know-your- customer process. This means that bringing in new consumers will be smoother for both parties.

Data aggregation, which will see banks collecting and using this data for practical use, will be the facilitator for all this change. It will also be the foundation for all services that give you the competitive edge, such as data analytics, valuable consumer insights and PFM. It will also provide banks with a monetising opportunity by allowing banks to view their customers’ current rates with other providers and match them with a better deal.

The banks who are not embracing Open Banking will put themselves | © IBS Intelligence 2018

Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52