Five key recommendations for Open Banking success

Recently, we hosted the Open Banking Summit 2016 in London. The event was designed for financial services executives to gain advice and insight on how to jump-start the execution of their Open Banking strategy and the role APIs will play in helping these initiatives succeed.

Discussion ranged from understanding new product strategies to how to ensure the right systems are in place to embrace the new PSD2 regulation, hearing from speakers including Nationwide, RBS, Accenture and many more.

Below are five key things I heard directly from our speakers on the day:

1.    Don’t get left behind

“The future is not like the past. Banking institutions, like Nationwide, no longer have the same level of control over how the information they have is accessed or their core transaction activity. With PSD2, this will be opened up across the board and it will be game-changing. It’s just the speed at which this change is happening that’s hard to read. You don’t want to be left behind,” Simon Hamilton, CTO, Nationwide

2.    Get on with it and be ready to collaborate

“When you talk to banks individually, many are just getting on with finding ways to implement PSD2. Ultimately, PSD2 is just three types of API. Publicly it’s all about issues around implementation, but privately, many are just getting on with it. Then there’s the Fintechs – they don’t really understand the regulatory side to the banking world and at the moment, everything looks rather easy. Eventually though, reality will kick in and there’ll be regulation, like PSD2, which will affect them too. Be sure to see a number of Fintechs collaborating with banks and payment service providers etc. in the next few years”, Jeremy Light, Head of Accenture Payment Services for Europe, Africa and Latin America

3.    Take the risk

“It seems that almost no one in banking has an open API for people to use. Why are the banks waiting for the EU to tell them to get going? There must be cultural fear. For example, now most banks have websites but there was a time when putting any form of data on the internet was considered a risk. Sure there are security issues, but it hasn’t destroyed the world. Take the risks. Don’t think APIs create a whole new risk or security issue. It’s just a different business model”, Ismail Chaib, Chief Operating Officer, The Open Bank Project

4.    Find internal evangelists

“Banks need to assign internal evangelists to get things moving and build momentum. Besides reaching out to external developers, learn what it means to have an API. Make it more tangible, let people touch it and experiment with it and find the right people to drive this initiative internally”, Alan Lockhart, Principal Architect, RBS

5.    Expect a trade off with the consumer

“Consumers are set to benefit from PSD2. There’ll be lots more competition. But these benefits will come at a cost – consumers will have to trade off some of their value. This might be information to third parties or something in exchange for the value given to banks. They will gain a lot, but there will be a trade-off. How this trade will be carried out – banks to consumers – is not yet clear. We should expect to see some of these surface very soon”, Javier Santamaria, European Payments Council