Open Banking: Golden Eggs & Lessons Learned

Aggregators will build the experience layer that sits on top of banks infrastructure, owning the customer relationship and reducing banks to a utility function.

There has been a surge of challengers and intermediary services, and they have made some headway as additional services that consumers access and find comfort in. Examples like ING Yolt were developed in partnership with Kin + Carta Create and now boast over 1,000,000 users. In terms of narrower aggregators, the “wallet”, both in its payment and loyalty linked-forms like Starbucks Wallet, have started to shift the method through which customer relationships are formed.

That’s not to say that incumbent banks have been usurped completely as experience providers for their customers - we’ve not seen banks lose out on customer relationships and loyalty to the extent we predicted.

We are, however, seeing an increase in consumer demands for a seamless, accessible, and personalised experience when accessing their financial information. A lot of our omnichannel financial services work over the past three years has been driven by these desired outcomes, balanced with the requirements of PSD2.

It transpires that consumers don’t mind checking multiple apps for their different bank accounts and banking relationships. At Kin + Carta Create, we work in alignment with the Jobs-To-Be-Done framework, that consumer behaviour and product uptake is driven by identifying the specific outcomes that consumers want to achieve given the specific situations, contexts and struggles that they find themselves in. One banking application per financial institution gives consumers what they need, at least for the time being.

Looking to 2020, it will be interesting to see what the next iteration of mobile wallets will be, and how this will impact financial institution relationship ownership. Broad wallet providers like Apple and Android Pay could optimise and enrich their experiences with merchant loyalty schemes and financial institutions to further decentralise the experience of seeing and spending your money from the experience of a bank.

A new ecosystem of platforms, vendors and partners will emerge offering a breed of services that can be plugged in and ready to go

The “build or buy” question pops up often when organisations are looking at their value proposition and areas for growth. Platforms and partners provide best of breed services in their specialism, while the bank can concentrates on its core value.

Partnerships, loyalty schemes, cross-vendor incentives and creating an ecosystem around your brand are not trends exclusive to banking, and many consumers are seeking joined up experiences that integrate how they navigate the world in general, especially when enabled by digital.

Integrated service provision is not new to the banking game - insurance products, or certain types of financing being white labelled and sold alongside premium banking offers are commonplace, and have been for some time. What’s been lacking to date is the ability to effectively enable those additional purchases or engagements in an intelligent and personalised way. Making a service feel tailored rather than marketed is a unilateral consumer driver across all brand experiences.

Open Banking has opened the door to enablement partners, who can deliver fast value to banks to help them effectively cross-sell services and understand their customers better. Progress here is slow but coming: the regulation surrounding financial services is intricate and varies hugely by jurisdiction, so enablement partners don’t have an easy job to get to market. This one is only a matter of time though - banks aren’t experts in AI or marketing, and tech-savvy partners will benefit incumbents and challengers alike.