Most large banks in Asia Pacific said that providing Open Banking services for their commercial clients is a key strategic initiative in their digital transformation programs, and many expect Open Banking to help them achieve double-digit revenue growth, according to a global research report by Accenture (NYSE: ACN).

Open Banking enables financial services commercial customers to share their financial data securely with banks and third parties, making it possible to easily transfer funds, compare products and manage accounts using application program interfaces (APIs).

According to the study, 90 percent of large banks in Asia Pacific said they plan to provide Open Banking services for their commercial clients, with half (50 percent) of the banks in the region expecting Open Banking to help them grow their revenues up to 10 percent and another one-third (33 percent) expecting it to help them grow their revenues up to 20 percent.

The report, “Opening Up Commercial Banking, The Brave New World Of Open Banking in APAC,” is based on a global survey of more than 750 executives at global banks, small- and medium-sized enterprises (SMEs), and large corporations.

Among other key findings: Commercial bank customers in the region often want the same things that retail bank customers want — more-innovative processes and a better customer experience — which Open Banking can facilitate. When asked to identify the most significant benefit of using an Open Banking ecosystem platform, respondents in AsiaPac most often said gaining access to convenient and innovative banking services, cited by 30 percent and 20 percent of executives at large corporations and SMEs, respectively. 

Commercial bank customers also expect Open Banking to help them reduce complexity and implementation costs for bank connectivity (cited by 24 percent of large corporations and 23 percent of SMEs) and enable them to reach more clients and partners (cited by 19 percent of large corporations and 21 percent of SMEs). When asked to identify the business areas that could be most improved in partnership with their bank through Open Banking, respondents at SMEs in AsiaPac cited payments, finance and cash management, while large corporations cited finance, treasury management and payments.

“Much of the focus so far when discussing Open banking has been on the retail market, but value-creation can be just as big, if not bigger, in the commercial banking side,” said Fergus Gordon, a managing director at Accenture and banking practice lead for Asia Pacific. “Demand from businesses is clearly there for innovative services and banks have a lot to gain by tapping into those opportunities.”

The vast majority of large banks in Asia Pacific ― 80 percent ― have invested in Open Banking initiatives for their commercial customers or plan to do so next year, less than the 87 percent global average. But banks in the region plan larger investments than global counterparts to build out their Open Banking commercial platforms, offer third-party services and explore Open Banking use cases, with 39 percent planning investments of more than US$20 million, compared with 21 percent of banks in North America and 14 percent in Europe looking to spend that amount.

The study also found that more than one-third (41 percent) of commercial bank customers in the region already participate in Open Banking platforms and another 37 percent plan to do so in 2019 (compared with a 35 percent and 42 percent global average, respectively). When asked who they would prefer to partner with on Open Banking initiatives, three-quarters (75 percent) of large corporate clients and nearly two-thirds (63 percent) of SMEs cited their bank, in line with global figures; only 12 percent of large commercial clients would prefer a non-bank technology provider, while 16 percent of SMEs in AsiaPac said they would be more interested in partnering with a non-bank fintech company.

“Banks have the benefit of a long-standing relationship with their corporate customers, but the writing is on the wall for them to keep transforming and develop new Open Banking services as these innovations become more prevalent or they risk being left behind,” Gordon said. “They should pay particular attention to SMEs, who show a willingness to partner with non-bank fintechs and technology providers.”