Open banking refers to the concept of banks opening up access to their data to third parties, most commonly via open APIs. Typically, open banking is being introduced at the behest of regulators, such as the CMA in the UK. Both public (e.g. product specifications) and customer data (account and transactional data) come under the remit of open banking.
Consumers will have the right to share their account data at their discretion with approved third parties in order to gain access to extra products and services. These may include account aggregation services that give users a single view of all the accounts they hold with different providers, or services that allow consumers to make accurate product comparisons.
The ultimate goal of open banking is to encourage innovation by making it easier for specialist providers to compete with banks on a more equal footing, and hence to improve outcomes for consumers by making more choices and options available to them.
Open banking will have a huge impact upon the retail banking sector in the longer term. The use of APIs in financial services is already experiencing massive growth, with the number of relevant APIs listed with Programmable Web, an independent global directory of APIs, increasing by over 1,400% since 2010.
Banks that embrace the concept will be able to become one-stop shops for the best products on the market, crowdsource the development of new services, and generate revenue by selling access to their data and capabilities.
The report "Open Banking - Thematic Research", offers a framework in which to look at Open Banking, summarizes the important trends, and identifies the key players.
The report also helps in identifying factor that will determine the long-term success or failure of open banking:
- The single biggest factor that will determine the long-term success or failure of open banking is consumer adoption. Open banking has got off to a slow start, with low levels of public awareness and the failure of banks to meet the January deadline for API implementation limiting adoption to date.
- Banks can employ a number of different strategies to exploit the opportunities afforded by open banking. Using the bank as a marketplace strategy, banks will transform themselves into portals, using their open APIs to allow third-party services to be accessed from within their own platforms.
- Open banking widens out the lending value chain to encompass third party providers. These comprise both full-service lenders and specialists that deal with specific aspects of the lending process. They will use one of two key distribution strategies: either using a bank’s marketplace for third-party products or direct-to-consumer distribution.
This report provides a comprehensive analysis of open banking, including a detailed examination of the key players shaping the new environment.
The report offers insight into:
- How open banking will disrupt existing value chains in retail banking
- The technological, macroeconomic, strategist, and regulatory factors that are driving open banking
- Which providers are currently taking a lead in exploiting the opportunities afforded by open banking.
Reasons to buy
- Understand how open banking will affect how you can generate value in lending, payments, and the provision of account information services.
- Learn which of your competitors are leading the way in open banking and what they are doing.
- Equip yourself to deal with the disruption that open banking will cause in lending, savings and investments, credit scoring, account information services, payments, insurance, and loyalty schemes.
Table of Contents
- OPEN BANKING BRIEFING
- Technology themes
- Macroeconomic and strategic themes
- Regulatory themes
- INDUSTRY ANALYSIS
- Lending and account information services will be the most affected activities
- Market size and growth forecasts
- THE LENDING VALUE CHAIN
- Banks will create marketplaces to distribute third-party products
- THE PAYMENTS VALUE CHAIN
- PISPs are well-positioned to dominate the new landscape
- THE ACCOUNT INFORMATION VALUE CHAIN
- Consumers are receptive to account information services
- SMEs will adopt account information services more quickly than consumers
- COMPANIES SECTION
- Vendors and facilitators
- Account information and PFM
- Savings and investments
- SME lending
- Consumer lending
- Credit scoring and profiling
- APPENDIX: THEMATIC RESEARCH METHODOLOGY
A selection of companies mentioned in this report includes:
- Banco Original
- Capital One
- Credit Agricole
- Danske Bank
- Deutsche Bank
- Fidor Bank
- Starling Bank
- Wells Fargo
- Silicon Valley Bank
- Sutor Bank
- Bud Financial
- First Direct
- Fractal Labs
- Business Finance Compared
- Funding Options
- SafetyNet Credit
- Credit Kudos