New data published today from open banking platform Tink reveals that positivity towards open banking opportunities had grown by 6 percentage points in 2020, with almost two thirds of financial institutions in Europe (61%) now feeling positive about open banking.
The survey, based on 290 senior decision makers at financial institutions in 12 European countries, also found that more than half (52%) feel more positive about open banking than last year and just 1% felt more negative about opportunities.
Positivity increases, but many lack strategy to realise full benefits
Though a large number of financial institutions recognise the open banking opportunity, findings suggest that some institutions remain unclear on how to realise its potential. Almost half of respondents (46%) were not confident that benefits were widely understood within their organisation, and 42% claimed that their organisation did not have a clear strategy to realise those benefits.
Daniel Kjellén, co-founder and CEO, Tink, said: "While there’s growing confidence in open banking, many still have not fully grasped its true potential. Some financial institutions have missed a trick by approaching open banking purely as a PSD2 compliance issue, while others view it as a long-term strategic play that involves a significant shift in their business model over time. Both these mindsets mean financial institutions risk missing out on the open banking business boost there for the taking today.
“For savvy and nimble institutions who look beyond compliance and can innovate fast, there is a huge opportunity for short term, quick win value creation through open banking. By behaving more like third party providers (TPPs) and making the most of APIs already on the market, institutions can reap the immediate benefits — creating improved products and services and enhancing customer experience.”
Fintech partnerships are a key priority
Those taking full advantage of open banking see fintech partnerships as a top priority. Almost a quarter of respondents (22%) have at least one fintech partnership to access open banking technologies, with some having up to five different partnerships.
Over two thirds (69%) of participants increased their number of fintech partnerships in 2019 and the same proportion (69%) indicated that establishing a fintech partnership will be a priority over the next 12 months.
Daniel Kjellén, continues: “To reap the benefits of open banking, financial institutions must translate their open banking strategy into a meaningful technology, product and service roadmap. This journey can be accelerated by building successful and strategic partnerships with fintechs that can provide the technology, expertise and vision to drive open banking value creation.”
Daniel Kjellén, concludes: “One of the promises of open banking is making financial services more digitally accessible to both consumers and businesses alike. With Cororavirus accelerating the shift toward digital channels, we expect positivity towards open banking to continue to grow as more financial institutions concentrate on the digital transformation of products and services. As a result, we anticipate a range of new open banking use cases to emerge that deliver immediate value to businesses and consumers alike by enhancing customer engagement and improving access to services.”