While celebrating New Year the North African way few days ago*, I reflected on priorities in 2019, especially with regard to Open Banking.
Setting priorities is no easy task, with compliance deadlines with PSD2, bank competitors launching their own offerings and new fintech startups entering the market ever faster. Many of the banks we met recently expressed a certain confusion over what to do next and how to win the Open Banking race.
So here is some guidance. If you are a bank and you have an Open Banking initiative underway, this is what you should be focusing on in 2019:
- Know your ‘why’: even if the initiative is ongoing, going back to the basic principles and understanding the objectives of the program, and disseminating it to bank staff and partners, is key to keep alignment and focus.
- Standardise: too many banks suffer from Not Invented Here syndrome (NIH) syndrome. Consider leveraging best practices and harmonising your API interfaces with the rest of the industry by leveraging an existing and accepted standard, such as the Open Bank Project catalogue or the Berlin Group framework.
- Monitor for success: make sure you are tracking the performance of your APIs against some well-defined Key Performance Indicators (KPIs). You will want to track service availability, performance and usage but don’t forget compliance, benchmark against competitors and monitor third-party experience.
- Collect new use cases: banks should think beyond the typical regulatory use cases of access to account/transaction information and come up with creative services not offered by other financial institutions. APIs in KYC and onboarding, card management and data analytics will play a key role in differentiating your offer from others.
- Build Momentum: as the Open Banking story gains momentum in 2019, banks who already operate in this space should focus on their communication effort. Invest in educating your team, your partners and your customers on the benefits and risks of Open Banking.
- Plan ahead: Open Banking is here to stay. Successful actors will focus on building a long term strategy that goes beyond compliance and that delivers value to all parties involved – the bank, the partners and the customers.
Of course, an EU bank with pressing PSD2 deadlines will have a different to-do list than a US bank embarking on the Open Banking journey. However, perhaps even more important than actually undertaking the above steps is having a clear view on which items to focus on.
It takes a clever combination of technology, expertise, astute leadership and dedication to master the challenges ahead. If done right, the prize for the winning banks is a superior customer experience and a key competitive advantage.
So what about you, how does your Open Banking to-do list look for this year?
* The North African New Year starts on January 12th