Creating an open banking textbook for 2022 and beyond

Open banking is a topic that can no longer be ignored the vast majority financial institutions that expect the biggest changes in the next five years.

The possibilities of open banking are huge. Banks connect points and develop deep customer journeys; enter an exceptionally wide market; integrate with third-party services; and expand your own offering – all for fuller engagement with an expanded customer base.

Those who are at the forefront will be in the best places to set the necessary parameters to ensure a smooth transition to this wonderful new world. But where to start?

Evaluate the journey

For many American banks, the immediate task is to assess how ready they are for open banking, and prepare for an active rather than a reactive stance for future change. Much of the work in 2022 will focus on reviewing current platforms and enabling them to be hosted in open banking and any other initiatives that require real-time capabilities.

This will certainly require a clear roadmap and almost certainly a reallocation of resources and budgets. The roadmap will also need to take into account regulatory considerations so that any impact of legislative changes can be absorbed along the way.

Directors of information technology in the room

Banks need to attract the right people, and it is important that IT departments are fully aligned with business strategies. This, of course, is always true, but especially in this case. In open banking, technology is not an application or extension of a range of services. This is a service.

Thus, organizations need the active participation of the CIO: not only in technical discussions, but in all aspects of the initiative. An added benefit? They will be in a better position to take advantage of institutional knowledge and provide invaluable information during the transition.

Open API information

The whole concept of open banking revolves around the use of open APIs – code snippets that allow different systems to “talk” to each other and share information. It is already widely used in banking to connect internal functions – but now they have to connect to third parties and even competitors. Because in an open banking environment, fintech business is not just destroyers, but also potential partners.

Establishing the right open APIs is critical to creating this collaborative environment in which customers are the primary beneficiaries.

Dig up the data

Having stored their valuable information in various bunkers for many years, banks have not yet realized the true potential of this most valuable commodity.

Open Banking is also changing that. With open banking comes vast streams of data in forms that can be organized and used to create value – provided the systems are needed. Internal data reserves are also enriched by external information coming from both structured and unstructured sources, from CRM systems to social media posts.

The result is a powerful cocktail of data: so banks need to make sure it’s also not hidden deep in outdated systems.

Open banking means open partnership

Finally, banks can also take advantage of the know-how of partners. Open banking is simple: open and joint. More than ever, banks will work with third parties of all kinds, including the experience of implementing open banking ecosystems – as seen in Europe and Asia. This can be the difference between sailing into the future or staying on the rocks.

Fortunately, the experience is there. Banks just need to talk openly about their requirements.

Find out more at Backbase.com

https://bankautomationnews.com/allposts/retail/creating-an-open-banking-playbook-for-2022-and-beyond/ Creating an open banking textbook for 2022 and beyond

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