Understanding open finance as a strategic direction will be critical for financial institutions who want to stay relevant. But is open finance the only realistic strategy given the way financial services has changed?
Our panel – The strategic view: open is the only way ahead, sat down on the FTT Open Finance stage at the FTT Festival on 15th November. The panel discussed how open finance will be an essential strategic decision and how an institution becomes more open, both from a technological and cultural perspective.
The panel, moderated by Kieran Hines, Senior Analyst at Celent, emphasised the importance of approaching open banking and other technologies with an open mind. A clear gap between traditional financial institutions and fintech and challenger banks, can be seen in terms of culture and open-mindedness.
Smaller financial institutions typically see regulatory compliance as an opportunity. New banks are marketing open finance on their websites and promoting it as a customer benefit.
Traditional banks have copious amounts of wisdom and customer data. If they can change their mindsets, begin to see open finance as an opportunity, and show willingness to collaborate with third parties, the value they will unlock will be huge.
As Hany Choueiri, Chief Data Officer of Aldermore Bank highlights, innovation and opportunity often start with a mandate to provide framework and governance. This is a necessity to move a system forward and encourage competition within the industry, which results in better products for customers.
A change in mindset towards technology is not all – the panel discussed how banks need to concentrate on becoming a companion to the customer through their entire lifecycle. Rather than focusing on a financial product and trying to sell it, banks must focus on where a customer is situated in their life cycle, and then look at how the bank can help them.
The benefits to financial institutions who adjust mindsets and strategies will see the long-term benefits. Greater customer trust in the bank will come as technology helps banks improve their services and be more transparent.
There is also the educational value that comes with open finance. The panel highlighted the importance of open banking in educating customers, and additionally how the economy will change. Children are learning to code at an early age, which will impact the future of the workforce. The increased education and demand for talent will be crucial in broadening the open finance ecosystem of the future.
The panel cover much more, including what we mean by “open” in terms of open finance, how banks can embrace opportunities in open banking, and parallels in evolving ecosystems around blockchain and cryptocurrency. You can listen to the full recording below.
Kieran Hines, Senior Analyst, Celent (moderator)
Hany Choueiri, Chief Data Officer, Aldermore Bank
Keshvi Radia, Head of Product – Payments, Allica Bank
Felipe Peñacoba Martinez, CIO, Revolut
Tarun Sachdeva, Chief Strategy Officer, Ziglu