Open banking is changing how customers use financial services and automating the process of signing up. It also provides valuable data for creating personalized business offers. Nevertheless, the uprising is still ongoing.
The convergence and melding of finance and data enables a new model: banking-as-a-service. This shift paves the way for enhanced security, increased cross and upselling opportunities, and personalised services stemming from data management. By incorporating third-party services, banks enrich their portfolio and boost new revenue streams while trimming development costs. In essence, new financial services can seamlessly mesh with other activities, simplifying payment or financing phases.
As the blend of sectors transforms the payment experience, ushering it onto open platforms and integrating with other services, banks must rise to the occasion with increasingly seamless yet secure experiences. Frictionless digital customer onboarding processes and KYC services emerge as pivotal factors of the customer journey and are undoubtedly key to maintaining a competitive edge. Hence, investment in services that streamline onboarding processes and access to payment systems, thereby enhancing the customer experience, is a must.
Automation is key
Banks should look to automate all data gathering processes throughout the customer journey, utilising business process automation systems powered by technologies such as artificial intelligence and big data analytics. The payoff includes streamlined workflow, time and cost savings, and a reduction in human errors, which bolsters reputation and aids compliance with anti-money laundering requirements.
Value-addition through analytics
Maintaining a unified view of the customer across all touchpoints, both online and offline, helps to discern and examine behaviours and habits, paving the way for highly targeted, effective, bespoke offers – thanks largely to analytics. Banks should monitor the entire customer lifecycle to formulate customer journeys that best meet specific needs.
Technology has a crucial function here. Platforms like WinWebServer (WWS), for instance, facilitate the integration and management of different channels, streamlining the creation of account aggregation platforms and third-party integrations. This helps financial institutions not only retain a competitive edge in payment services but also offer customers an extensive range of transaction options across various touchpoints and take data-driven business decisions.
Data and finance: a symbiotic relationship
The intersection of data and finance acts as the catalyst for change in the traditional banking and financial services business model. Leveraging and valuing the vast data at their disposal for analysis and sharing with third parties can lead to a new, service-oriented banking model that enriches the customer experience and service. Consequently, the bank morphs into an open platform that customers can use to obtain pay-per-use services.
Fintechs as the enabling force
Fintechs furnish the necessary tools to actualize these services. Fintech technologies improve traditional banks by using advanced algorithms to automate and make their internal processes more efficient. This gives them an advantage by offering innovative, user-friendly and unique products and services.
Given the challenges banks face in developing these requisite technologies in-house, reliance on external fintechs and banking-as-a-service providers with the necessary expertise, capabilities, and resources to provide cutting-edge solutions is essential.