It’s easy to understand the excitement around open banking; it’s a game changer! Not only will it improve customer service and data security, but it would also generate new revenue streams and create a more financially inclusive world. Just imagine this: many of our financial lives’ mundane, administrative tasks will disappear with automated and interconnected technology. Next level customer-centricity is not the only advantage here; open banking adoption will lower entry barriers for fintechs and businesses like never before – enabling innovative collaborations with banks and creating alternative business models for financial services.
But, sometimes, with new technology comes feelings of apprehension and uncertainty – especially when it’s meant to shake-up and transform the traditional ways of the financial services sector. The good news is open banking, while still in its early stages in the MENA region, has been in the global market for a while with a track-record of tried and tested benefits for financial sector market players. And banks have a lot to gain.
The digitalization of financial services is lowering barriers to market entry, so it is not a stretch to say that banks will face increasing competition with fintechs and businesses gaining licenses to offer financial solutions.
One important factor to remember here is that the natural advantage that banks hold cannot be discounted: trust! Over years, and even generations, banks have created relationships of trust with their customers – relationships that are not easily replaceable. This means that well-regulated and familiar banks are most likely to remain central to commerce and society for a long time to come. In this quickly evolving environment, the amount of competition pales in comparison to the plethora of opportunities coming about with open banking, as a complete and positive transformation for the sector is on the near horizon.
Here are at least five ways banks can benefit from open banking:
Imagine, for example, a personalised, weekly newsletter for each client full of information about innovative and just-launched products and solutions based on their preferences. Or case studies of how customers created wealth through using the knowledge and insights of the bank. We have already seen some major banks reshape their operations to increase agility and ability to navigate the new normal. These banks will not only survive the coming challenges but are also likely to thrive in the new regulatory environment.
For banks that have yet to begin to analyse their current operations in relation to open banking, now is a good time to start.
It’s simple: banks that are first to take the decisive steps towards open banking have the advantage, and partnering with the right open banking platform is the key to success. When investing in tech development to meet open banking standards, we know from the experience of early adopters that it’s an excellent opportunity to go beyond compliance and prepare the bank to meet its future needs as well as its customers.
Senior banking teams should choose their open banking partner carefully, using criteria beyond just cost. Think about: expertise, network coverage, seamless integration, and security. In parallel, also think about TG Connect as the solution that offers you all the criteria you need to get your open banking journey started.
And, if you’re a doer like we are – get building on our Developer Portal right now!