Other parts of this series:
In my previous posts in this series, I talked about the importance of getting technology, security, operating models and governance right when navigating the Open Banking journey. An equally crucial factor is the activation of the ecosystem.
Open Banking requires and depends on partnerships—from suppliers to business collaborators and from vendors to customers. Banks have to build an ecosystem of alliances.
Collaboration across the value chain
From our experience helping banks implement Open Banking across the globe, we know that they have a choice—to build their Open Banking capabilities by themselves or to form partnerships with fintechs, bigtech and other third parties outside the financial services sector. Those who do partner with these ecosystem players tend to acquire the necessary capabilities, launch a wider proposition tailored to market needs and deliver this proposition to their customers—all more quickly than going it alone.
Focus on developer portals
Developer portals are the new channel and interface into the ecosystem. Banks need to engage with their new partners—developers—by providing a ‘best-in-class’ capability with clear documentation, easy-to-use registration processes and first-class support. These all could help with effective API deployment. Additionally, easy onboarding, a simple legal framework, clear documentation and flexible pricing models are features that encourage ecosystem engagement.
Collaborate with regulatory and industry bodies
In a time of volatile requirements, banks need to work collaboratively and openly with regulators and industry bodies to help ensure a safe and consistent approach to Open Banking. Maintaining dedicated interfaces with the regulatory bodies and sharing experiences/best practices in a transparent manner will contribute meaningfully to success.
Educating the customer
Last but not least, customer education is essential when implementing Open Banking solutions. In the UK, one year after the launch of Open Banking in Europe, 72 percent of adults were unaware of the new regulations. A lot of customers are still wary of sharing their data with third-party providers, as they don’t fully understand what that means. In a lot of European regions, customers were not adequately educated, so they still do not understand the key principles of Open Banking.
Banks need to do a better job of supporting customer education. The main message should focus on customer journeys, security and data privacy rather than the technicalities or the technologies used for the journeys. Customer education and the simplification of the customer journey are even more important now, during the COVID-19 pandemic, when many customers are moving to digital and trying Open Banking solutions for the first time.
These are just a few of the lessons we at learnt helping banks with the implementation of Open Banking. The journey has been long and complicated, but in a sense, it is merely the beginning of a new era of innovation, collaboration and growth.