Open banking has gained momentum in the global banking industry. Banks and Fintechs are adopting the new approach to revolutionize services quicker than ever before – keeping customer needs as the focal point.

As banks and financial institutions across Europe are adopting the concept of open banking, it lays an impact on the user experience in terms of digital payments, managing finances, and account data. Let us take a closer look at how the new concept plays a critical role in providing improved financial services to consumers.

Taking customer-centric to the next level

The move to open banking drives banks to offer services in a scalable fashion with innovative technologies. This major trend opens up avenues for banks to put consumers more in control of which:

  1. products and services they wish to avail related to their bank accounts and
  2. channel they wish to choose to buy the required products and services.

Open banking model provides banks with an opportunity to respond to the demand for ‘customer in control.’ As the fundamentals of open data start to flow, banks could discover new areas of opportunity for future growth. They could serve as a trusted partner while offering banking services that are user-friendly, secure, and bug-free. Open banking also allows banks to expand their ecosystem to better serve customers with unique products and services.

In response to embracing open banking, HSBC launched Connected Money app in 2018, which enables users to access multiple bank accounts under a single roof. Another banking giant, ING launched Yolt app in 2017, which helps users to manage multiple bank accounts and offer other features like tracking payments and savings history.

For Third-Party Providers (TPPs), access to bank’s data will surely provide insights into customers’ financial requirements and their aspirations. After analyzing them, Fintechs will be able to offer more seamless, intuitive, and value-added financial services.

The way forward

‘Customer in control’ is amongst the key values of open banking apart from promoting faster digital payments and healthy competition in the market. To do this, it put the customer data at the absolute forefront to push innovation and new possibilities.

The key to innovation in this data-driven market is to involve customer interest right from the origin of the development of services. By putting customers at the heart of new products and services, banks and TPPs can maximize the likelihood of leveraging new opportunities the market would present.

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