The future of banking is open
Consumers have already experienced era-defining changes in how they listen to music, watch entertainment, learn and shop – through digital technology.
It was only a matter of time before these trends impacted the financial services landscape and today we are increasingly seeing the emergence of empowered end customer experiences. The unbundling of banking services known as Open Banking is here to stay, enabled by the great strides forward in cloud computing, smart devices, mobile connectivity, AI and universal access via open APIs, and spurred on by regulatory drivers. Consumer expectations are being re-set and business models redefined across the industry.
COVID-19 has increased this momentum. Over the past four months the world has seen a surge in digital usage as hundreds of millions of consumers have been subject to lockdown, with adoption rates skyrocketing across the globe. With increased competitive pressure in the industry, using digital in a far more consumer-centric manner has become the only game in town when it comes to acquiring, engaging and retaining customers.
The term Open Banking is gaining more and more currency, but what does it mean in practice? Why does it matter? And what are the risks and the opportunities in this new environment? These questions are discussed in our white paper, The Future of Banking is Open, which also shines a light on five different Open Banking strategies adopted by some of the world’s leading financial institutions, both old and new.
We are clear in our view at Visa that the ecosystem needs to work together to embrace the benefits of Open Banking, with a focus on consumer value being at the centre of any approach.
Our white paper outlines five key considerations for any business to consider when designing a competitive strategy for this new era:
- Assess your landscape – and how you fit into it
Understand your market and regulatory environment and how it may evolve, the trends that may take root, and the potential opportunities and risks for your business. Furthermore, in an Open Banking world, the only viable approach is an ‘outside-in’ one, where sensible ecosystem partners are leveraged to deliver the best consumer experience.
- Take an honest, unflinching look in the mirror
Take an in-depth look at your organisational structure, channels, performance, partnerships and future prospects. No organisation is good at everything, choosing where and how to play is more crucial than ever.
- Plan your strategic response
Outline and contrast the strategic options for your future banking model and highlight any key implications, from potential risks to required investments.
- Plot your discovery-to-delivery journeys
Create a framework to devise, define, develop and deliver a range of new propositions and agree a methodology and common structure for each of these. Start with consumer value creation as your North Star.
- Watch your performance closely
Set meaningful targets and KPIs to track your progress, paying particular attention to your attrition performance and customer engagement levels. Intelligent, agile pathfinding will be required as part of this journey, as there are no universal truths that have been proven yet.
As Visa’s MD for European Regions, Antony Cahill is responsible for Visa’s business in 35 countries across mainland Europe. Through deepening client relationships, he is focused on bringing to life Visa’s mission to connect the world through the most innovative, reliable and secure payment network—enabling individuals, businesses and economies to thrive. Antony has more 20 years’ experience in banking and financial services having held executive leadership roles across product, retail, corporate, institutional and business banking, finance and strategy at NAB (National Australia Bank) and ANZ (Australia and New Zealand Banking Group).
Claudio is based in London and leads the Visa Consulting and Analytics practice regionally for Visa Europe, and has 25 years’ worth of experience in strategic advisory, management consulting and business transformation. Claudio’s primary expertise is in digital and ecosystem strategy, as well as leveraging technology and data to drive growth and operational efficiency in financial services organisations. He has spent over 17 years working primarily with banks across Europe as well as the US and Latin America.
For more insights on how Open Banking is shaping the future of our financial system, read our full white paper here. To find out how we can help you evolve your business model for Open Banking, get in touch with our Visa Consulting and Analytics team.