Why open banking is the rebirth of banks in the digital space
Let’s face it. Open banking often tends to focus on how businesses can compete with banks and financial institutions to create the best services.
Aiia has always advocated that banks can benefit just as much from open banking as businesses and fintechs can. So can open banking bring back banks in the position as leaders in the financial services industry?
We sat down with our Head of Banking Solutions, Ulrika Anderson, and our Vice President of Product Sales, Jozef Klaassen to discuss that.
Let’s hear what they said.
The future of banking is a service
For the past many decades, banks and financial institutions have played an important role during major events in our lives – when buying a house, a new car, having kids or getting married.
But with open banking, banks actually have the chance to become extremely relevant in our lives on a daily basis, Jozef Klaassen, VP of Product Sales, points out:
“Open banking is a tremendous enabler for banks. It brings them back into that vital role of a trusted mechanism of exchange, whether that’s in authorising the sharing of your financial data with your accountant or making payments. From a consumer perspective, open banking is somewhat invisible. What the consumer sees is simply their bank popping up in all sorts of digital channels. Before open banking, the bank was invisible in many daily events, even fading completely,” he says and continues:
“Now, when you buy new shoes, you can use your bank in the checkout process. The same goes for when you receive an invoice from your gardener or electrician and you want to use your bank to pay the invoice directly with your bank account. In many ways, you could say that open banking is the rebirth of banks in the digital space,” Jozef Klaassen explains.
It’s time for banks to shine
There’s no doubt that there is an immense potential for banks to truly monetise open banking by building user-driven services that are helpful and relevant in consumers’ everyday lives, our Head of Banking Solutions, Ulrika Anderson, says:
“Most banks I talk to are well equipped for the future and often more innovative than what the broader customer audience knows. It's time for our banks to shine and open banking can in an easy way support use cases and functionality to support that journey,” she explains and emphasises:
“To do that, banks can be even more vocal about what open banking is and why their customers should use it. I can't stress this enough how safe it is to use open as a data source and as a payment initiator. I believe that many customers across Europe may think that banks are slow and not evolving fast enough. That is a big misconception, I believe.”
According to Ulrika Andersson, open banking does not only enable banks to provide faster and more simple ways of sending money and making payments for their end customers in a cheaper way:
“The magic comes with the data that can be used for multiple use cases, like categorisation, income verification and KYC. Using data for all types of verification and scoring will increase the use of open banking in the future,” Ulrika Andersson points out.
With even the simplest use cases like sending and receiving money from one account to another bank can enable a quicker and more simple way for any end customer to expand outside of their ordinary digital banking world:
“Being able to view accounts in other banks, seeing transaction information for several accounts in many different banks in real time only being logged in to one digital point is revolutionary for me. My favorit payment feature is the simple "drag and drop" when topping up an account from one single platform. I don't have to know my account number, simply just move funds from one account to another, from one bank to another from one single point of platform,” Ulrika Andersson concludes.
If you want to know more about how open banking can be the rebirth of banks in the digital space, please feel free to drop us a line or meet us at this year’s Money 20/20. Just like many years before, the event will gather Europe’s leading financial services under one roof and we can’t wait to see you all during an exciting week in Amsterdam.