A plug-and-play solution
API based banking is going to be the new playground of innovation
This, to me, is the battleground when I’m talking about the digital revolution, the digital human, the digital bank: If you do not get cognitive, predictive, proactive, custom analytics that give the customers a far more informed view about their financial affairs, you will not be the partner for that customer in their financial future – Chris Skinner, author of Digital Bank and its sequel, ValueWeb
Open banking has the power to provide access to the one and a half billion unbanked people globally. This type of platform service gives people access to services that could not have been given by a bank on its own. Moreover, with smartphone users growing to over six billion, it has never been easier to reach such a large base for banks.
Also, it is a model that allows the sharing of banking data via APIs between unaffiliated parties. Therefore, it enhances banking services to users.
The 3 key drivers of open banking:
- Favourable regulations
- Access to customer data through API’s (provided privacy and security concerns are met)
- Digital first approach
Favourable regulations
The 3 benefits of customer data through API’s
- Serves those that can’t be reached by banks
- Increases attach rates of digital products and services
- Builds a marketplace vs a shop
The 3 benefits of a digital first approach
- Low cost to serve helps profitability
- High customer loyalty keeps the user within the bank’s folds
- Becoming a data centric firm brings it closer to the cutting edge in tech