New Banking Tribes as a Result of Open Banking Have Arrived

New Banking Tribes as a Result of Open Banking Have Arrived

Steve Morgan

Senior Director, Financial Services Europe at Pegasystems

Views 490

New Banking Tribes as a Result of Open Banking Have Arrived

10.02.2020 05:30 am

Open Banking has fundamentally changed the game for all of us in the banking and financial services sector. With shifts involving customer data, naturally there have been concerns as organisations transform, from how they can get a sufficient return, to the need for security, to the need to adhere to the new regulations. However, Open Banking has been a positive force, providing improved service, especially regarding information, for customers and greater potential for revenue for service providers.

While there are sets of rules in place governing financial institutions, banks and financial organisations have had the ability to choose which ‘banking tribes’ they want to be a part of.

Tribe 1 – Cautious followers

Some banks have made the decision to do the minimum – and that’s okay. Far better to walk before you can run than tripping up trying to get ahead too fast. There are difficulties with change and data due to their core systems and technologies being old and cumbersome. Financial groups in this tribe have followed CMA guidelines, ensured they share payment data and allowed their customers to share their own payment data with third parties. Some of these financial service providers have established partnerships or invested in challenger start-up brands too.

Tribe 2 – Customer pleasers

Other banks have taken it one step further, allowing customers to link multiple bank accounts under one app, such as Barclays, Lloyds and HSBC, making it easier for customers to keep track of all their spending in one place and keep tabs on their savings to drive loyalty and retention.

Tribe 3 – Technology mavens

Financial organisations in this tribe have launched digital banking brands, such as RBS which has soft-launched Bó, or offered new banking services such as automatic receipt capture and invoice billing or partnered with third parties to start offering new financial products and services they don’t already offer. Some have looked at white label banking products or are offering banking as a platform services, such as BBVA in Spain. BBVA has created a new revenue stream enabling third parties to launch anything from a current account to an app with multiple products using its cloud-based platform.

Tribe 4 – Non-banking newbies

Those in tribe 4 have begun putting non-banking services on the table, using third parties to offer customers better deals and enable ease of switching service, such as for energy. We could soon see banks doing the same for TV, broadband packages and other services. Data is readily available through current accounts or credit cards, and sometimes all it takes is emailing a bill and then clicking a new offer. No paperwork and savings generated for the customer.

But what does it mean for the wider industry? Well, it’s true to say Open Banking is introducing change to the financial sector but customer demands are also increasing the level of competition. This is only going to get fiercer. No matter which tribe an organisation is part of, the same message applies for all of them. To succeed in the new era of Open Banking, it is vital to have a clear strategy, figure out their goals for achieving that and make sure they have the right team, technology and any third-party support in place to make it happen.


Latest blogs

Jonas Andersson Fingerprints

In Consumer Biometrics We Trust: Authentication For the Data Privacy Age

Data privacy is high on the global agenda. In the wake of data protection policies such as Europe’s GDPR, ensuring the integrity of personal data is an increasingly pertinent subject. This is a governmental and corporate policy reflection of the Read more »

John Burgos Mindgate Solutions

Overcoming anxiety around mobile payments & digital payments - In the South Asia Pacific

Innovation and technology usually go hand in hand.  Therefore, for innovation to be fully realized, the technology that enables the innovation must be adopted as well.  During the last 5 years, we have had innovations from Google, Apple, Read more »

Stuart Robertson iDelta

Finance Sector PLCs Hold the Key to Economic Recovery

We have started to see the devastating impact the Coronavirus will have on our economy.  The travel, leisure and hospitality industry redundancies are rapidly mounting up with restaurant and bar owners facing no option but to shut up Read more »

Hirander Misra GMEX Group

Are UK Banks profiting from the current coronavirus crisis and failing SMEs?

A UK business could be eligible for a Coronavirus Business Interruption Loan Scheme (CBILS), as set out by the UK Government. However, it appears that despite the Government’s best intentions, this scheme is not working in practice and some urgent Read more »

Otabek Nuritdinov Safenetpay

A strong fintech needs more than just access to funding

  Investors, both private and institutional, are excited about investing in fintechs that are in the payments services business. What are the issues that really should matter to you, as a client? In 2019, institutional investors Read more »

Related Blogs

Hakan Eroglu Mastercard

The Ambitious Path to Open Finance and Open Data ... How Europe is Leading The Way

Thanks to PSD2 in the EU, and open banking in the UK, Europe has been leading the way with its open banking initiatives. This significant development represents the beginning of a journey to democratise the financial services industry by allowing Read more »

Christian Ball GFT Group

Cloud And The Open Banking Opportunity

Although open banking has legislative origins - and is compulsory in some countries - it is also a major catalyst to bank transformation. In addition to the opportunity to generate new revenue streams, improve services and attract new customers, Read more »

Carlos Figueredo Open Vector

Open Banking - An Opportunity for UK Banks

The appearance of open banking created an immediate concern within the banks as they would now have to share customer data, competition from challenger banks, etc. Even though it is a well-known statement these days that “innovation will come with Read more »

Hakan Eroglu Mastercard

The Brazilian Way of Open Banking Regulation

Open Banking is unstoppable and is being discussed in almost every corner of the world – be it to increase competition, reduce cost, foster innovation or financial inclusion. In Open Banking, banks are opening up customer financial data and banking Read more »

Todd Clyde Token

Making Open Banking Pay with a Superior API

The success of open banking will ultimately depend on the difference it makes to customers. It’s one thing for people to be able to see all of their various account balances in one place. But if the process for moving money or managing payments Read more »

Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel