Collaboration and Culture: The Key to Success in U.S. Open Banking

The U.S.’ new Open Banking rules are an exciting development for the world’s largest market for financial services, but there’s a strong argument that it also has profound global implications.

This has two parts. Firstly, as a catalyst to drive companies outside of the U.S. to launch in America. Secondly, to activate a more ‘globalised’ Open Banking ecosystem for large banks and fintechs driven by international collaboration.

The U.S. market scale dovetailing with the expertise of existing open banking regimes in the UK, EU, Australia, Brazil and many more places is likely to be the longer-term story. With this in mind, this next chapter explores how best to approach international collaboration.

In his seminal work When Cultures Collide: Leading Across Cultures, Richard Lewis has some pertinent guidance to help companies navigate cultural differences in business and communication. He advises leaders when approaching doing business in America to place close attention to specific local knowledge.

“It is advisable to have on your team someone who knows their country [the U.S.] well.”

While this applies when dealing with any nationality, Lewis notes the particular importance of communication and language, especially for non-U.S. English speakers.

A common mistake, he says, is in “often assuming that Americans are similar because they speak the same tongue. Americans live in a different hemisphere and a different world. They do things their way and people who have lived in the U.S. know the shortcuts in doing business with them.”

Communicating Effectively In International Business

Whether it was Sir Winston Churchill or George Bernard Shaw who warned us that “England and America are two countries separated by the same language,” the clear message is in reminding us that international communication can break down even if we share a language.

These communication missteps can occur due to vocabulary being used differently (well-known examples include chips, pants, biscuits, smart), or differences in behaviour such as greetings, meetings etiquette, dress-code, gift-giving, contract negotiation, etc.

In international business, significant productivity gains can be achieved if your team understands the nuances of communicating in English internationally and pays attention to both linguistic and cultural differences.

Even though English still pervades as the most common language used for international business, the reality is that most international business environments are multilingual, multinational, and multicultural. A typical senior business person that you might meet in the U.S. may not be American, may speak multiple languages, may have worked in many different countries and will have acquired a range of different approaches to communicating successfully internationally.

Their own team will be made up of people similar to them in terms of experience. Every day they will be navigating linguistic and cultural differences, but they will be so good at it, it will be almost unconscious.

So, what do these great communicators do, and what can we learn from them? From my research, I discovered that in some ways it wasn’t very complicated, but it did take effort, patience, and great observational skills. There are 5 key elements to great international communication:

           ⭐️ Linguistic collaboration

           ⭐️ Inclusive mindset

           ⭐️ Meta-Level thinking

           ⭐️ Empathy

           ⭐️ Intercultural collaboration

Briefly, these can be described as follows:

• Linguistic collaboration is about making yourself understandable. This might include using less jargon, plain language, fewer idioms, fewer phrasal verbs, fewer wise-cracks; essentially ‘cleaning up’ your language so a wider range of linguistic backgrounds can understand you more readily.
• Having an inclusive mindset, in this context, builds on the above, and encourages the international communicator to engage in productive and useful behaviours such as great meeting etiquette, turn-taking on video calls, allowing time for clarification and meaning checking, and addressing unequal power dynamics due to language fluency.
• When we engage in meta-level thinking in international communication, we are seriously dialling up our observational skills and noticing when communication is failing, and making decisions about what steps to take to put it right.

Part of that might be noticing that those who are not speaking their first language may be finding the communication stressful, tiring, or confusing, and this requires empathy on our part. This empathy for others in international communication needs to include an awareness of potential negative emotions attached to speaking a language that isn’t your first language. That power can inadvertently lie with those whose language is more proficient, not necessarily those who are the most competent at their jobs.

Lastly, inter-cultural collaboration includes the delicate balance of ensuring you know enough about the countries you are visiting on business to avoid any faux-pas or blunders, but at the same time appreciating that sometimes company/organisation culture can trump national culture in terms of guidance regarding “how we do things around here.” Blunders and faux-pas can be avoided, but research in advance matters such as punctuality, handshakes (or not), eating and eating utensils, business cards, dress code, meeting format, and navigating organisational hierarchies.

However, it is also essential to understand the culture of the organisation and the personalities of your colleagues and counterparts to know how decisions are likely to be made, how negotiations may unfold, how projects are managed, how presentations are best received, how relationships are formed, how formal or informal communications play out, how rules and procedures are followed, how ideas are best brought forward, in fact, how best to play your hand at every moment in the business relationship.

Above all else, self-awareness is key. Knowing who you are, how you are coming across, and what impact you are having on others in international business is essential to your success.

A Deeper Consideration of Collaboration and New Business Models

A deeper consideration of collaboration and new business models will be required to meet the challenges ahead. One key question, as yet unanswered, is what models of competition and collaboration will drive the next Open Banking innovations?

Already, shifts in the market and operating models of API producers, aggregators, and new collaborations between banks and fintechs are emerging. The future is a new wave of collaboration. So how might this develop further?

As Douglas Coupland famously said in Generation X:
“In the same way you can never go backward to a slower computer, you can never go backward to a lessened state of connectedness.”

There is higher pressure than ever through increased competition, shorter product life cycles, speed to market, and the capacity to respond to new regulation. Adopting a longer-term strategic position will be required to reduce risk.

Three Successful Models of Collaboration

In a thoughtful academic report in 2019, Ard-Peter de Man provided a strategic lens, identifying three successful models of collaboration: Sharing, Specialisation, and Allocation.

• Sharing creates value by combining similar capabilities to reach greater scale. This requires high levels of integration, and value creation is predictable.
• Specialisation creates an innovative offering through complementary capability that neither partner could achieve alone. This model involves low levels of integration, with each partner carrying their own revenue and costs. Outputs are far less predictable.
• Allocation involves partners coming together with similar capabilities but reducing risk by allocating roles and responsibilities. This model requires focused integration with overlapping capabilities. It could easily be a consortia model for fintech startups.

De Man’s research pointed out:
“We find the choice for a business model is relatively straightforward in most cases, but the operationalisation of the business requires complex combinations of management.”

That said, while a strategic fit—aligned in terms of mission and values—seems an obvious prerequisite, it can often be marginalised by the need for access to technology or a quick response to changes in consumer taste.

The Need for Effective Collaboration

U.S. banks have had to be very quick to respond, to greater or lesser degrees, to fintech startups and newer challenger services that have gained traction through enhanced technology and a focus on customer delight. However, collaborations made in haste often fail to have longevity.

To begin forming a collaborative strategy, organisations must start by reviewing internally and answering basic questions:

• Who do we currently collaborate with?
• How do we collaborate—through open or closed networks?
• Can we identify successes we couldn’t have achieved alone?
• How would we govern new collaborations?
• What trade-offs are we prepared to make?
• Can we clearly define the business problem we are trying to solve?
• Who do we need to engage with that we currently don’t?
• Who are the industry conveners who can fast-track collaborations?

The Role of Open Banking Excellence (OBE)

Partners such as Open Banking Excellence have worked across the globe with companies and regulators alike, developing new partnerships, collaborations, and ways of working. This has led to the creation of deeply trusted symbiotic ecosystems.

One highly effective model for knowledge transfer and generation is ‘partner ecosystems.’ This approach—arguably one of the most mature and innovative forms of collaboration—stems from the work of Kramer and Pfitzer in their 2016 Harvard Business Review article, “The Ecosystem of Co-Created Value.”

Spending time evaluating and understanding the whole ecosystem allows for longer-term, strategic perspectives with more complex interdependencies between different types and sizes of partners. While harder to sustain, such models outperform traditional M&A work.

The Challenge for Large Institutions

For larger companies—such as global banks and card networks—the challenge is that innovation flows from interdependence, rather than traditional commissioning models.

For these systems to be successful, there cannot be a single focal firm as the key beneficiary. Instead, these systems work best when the consumer becomes the core beneficiary around which the ecosystem is positioned.

This approach aligns well with the financial inclusion philosophy of Open Banking and Open Finance—an idea that the founding pioneers envisioned and many leaders still passionately advocate for today.

Open Banking in the United States

In the United States, the Open Banking sector has seen various examples of collaboration among financial institutions, fintech companies, regulators, and other stakeholders. These collaborations aim to:

• Promote innovation
• Improve customer experience
• Enhance financial inclusion

At this critical pivot point, U.S. Open Banking requires senior leadership to reflect on the current position and scan the horizon for the future. Developing urgent collaboration networks is not just an opportunity—it is a serious strategic challenge.

Balancing competition and collaboration will be the defining factor. This raises difficult questions:

• How long should collaborations last?
• How will intellectual property be generated?
• How can brand integrity be protected?
• How should firms position themselves in the evolving marketplace?

What’s the alternative?

Going it alone might still be a viable strategy for some players within U.S. Open Banking. However, any company choosing this path must be confident that by not collaborating, they can still:

• Enhance knowledge
• Build capability and capacity
• Rapidly respond to changing consumer and regulatory landscapes

Failure to collaborate effectively might become a terminal decision. As Henry Ford wisely said:
“Coming together is a beginning. Keeping together is progress. Working together is success.”

Cultural Considerations in Open Banking

Culture is at the centre of strong business outcomes. How might dimensions of culture interact with Open Banking?

Understanding and accommodating different cultural dimensions can help navigate the diverse cultural landscapes when implementing Open Banking across various countries and regions.

Seven Dimensions of Culture and Open Banking

1. Universalism vs. Particularism

   • Universalistic cultures apply consistent rules and standards (e.g., the Netherlands’ strict data protection laws).
   • Particularistic cultures rely more on relationships and context (e.g., Japan’s business networks influence regulation).
   • The U.S. tends to align with universalism, with strict adherence to federal and state regulations ensuring standardised procedures.

2. Individualism vs. Communitarianism

   • Individualistic cultures (e.g., the U.S.) focus on personal data privacy and consumer control.
   • Communitarian cultures (e.g., China) prioritise collective benefits and social responsibility in financial services.

3. Neutral vs. Emotional

   • Neutral cultures (e.g., Sweden) base Open Banking regulations on objective criteria.
   • Emotional cultures (e.g., Italy) consider the human impact of financial interactions.
   • The U.S. leans towards neutrality, prioritising data security and objective measures.

4. Specific vs. Diffuse

   • Specific cultures (e.g., Germany) have clear Open Banking guidelines and protocols.
   • Diffuse cultures (e.g., Brazil) see regulation influenced by relationships and flexibility.
   • The U.S. operates with a specific approach—clear guidelines and structured frameworks.

5. Achievement vs. Ascription

   • Achievement cultures (e.g., Singapore) reward firms based on merit and innovation.
   • Ascription cultures (e.g., Saudi Arabia) prioritise hierarchy and seniority.
   • The U.S. follows an achievement-oriented approach, rewarding firms excelling in data protection and service quality.

6. Sequential vs. Synchronic

   • Sequential cultures (e.g., Canada) follow a step-by-step approach to regulation.
   • Synchronic cultures (e.g., India) consider multiple factors simultaneously.

7. Internal vs. External Control

   • Internal control cultures (e.g., the U.S.) rely on self-regulation within the financial sector.
   • External control cultures (e.g., South Korea) depend on government oversight for compliance.

Final Thoughts

The future of Open Banking depends on thoughtful, strategic collaboration. For firms in the U.S. and beyond, standing still is not an option. Those who fail to adopt collaborative models risk obsolescence in an ever-evolving financial landscape.

The Open Banking opportunity is super-sized in the US.

What’s the market size and how do we best access it?  What are the gotcha’s? What do we need to know…? 

 To answer these questions and many more we’ve had from our global community we’re sharing our latest report with Oxford University in digestible bite sized chunks.

The U.S. is the largest market for financial services in the world and the U.S. Open Banking market currently stands at $7.08bn with projected growth to $35.79bn by 2031. Fintechs in the U.S. scooped up 45.6 per cent of the global share of fintech investment in the first half of 2024.

Written by Dr Alexandra Morgan, Stuart Rimmer MBE,  Dr Fons Trompenaars. Extract taken from Chapter 8 of the Transatlantic Index USA. Download the report in full: https://www.openbankingexcellence.org/transatlantic-index/