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Open banking innovation: how to thrive in the new landscape
Banking is changing forever – and arguably for the better – thanks to the new ecosystem being enabled by a combination of legislation, market forces and technology.
In Europe, the shift has been set in motion by PSD2 regulations, while in North America it’s innovators who are transforming the financial landscape.
We’re talking of course about ‘open banking’ – a fascinating revolution that is democratizing money, empowering the individual and spawning innumerable new ideas.
But it’s also creating immense opportunities for traditional financial institutions. With the right tech partners, it’s possible for the behemoths of the banking world to deliver innovation previously considered the sole preserve of Silicon Valley startups.
However, it’s not always easy to know where to start and with that in mind, Iliad Solutions has produced Unlocking the Future, A financial innovator’s guide to open banking, an in-depth but digestible white paper designed to help businesses make the most of the new culture in banking.
Where to start with open banking
Split across eight insightful sections, the white paper talks about the innovations in open banking that are benefiting both business and retail banking customers. For instance, faster loan decisions enabled by new and reliable approaches to credit scoring powered by data, and improved information about trade positions thanks to real-time access to company income and expenditure.
The document also looks at how traditional financial institutions can overcome the challenges of legacy technology and integrate seamlessly with the kinds of modern platforms that enable high-demand open banking solutions.
In this regard, collaboration with third party providers is the key to success. Through partnerships banks can build a shared future without having to dismantle labyrinthine proprietary systems that have been constructed over several decades by multiple generations of developers.
Collaboration is the watchword in open banking
Thankfully, there are an increasing number of inspiring examples of collaboration between large banks and modern startups. In the white paper, this is brought to life through the case study of Lloyds Banking Group’s investment in motoring app Caura.
While funding will enable Caura to build new features in iOS and Android apps, it’s also likely that it will help Lloyds strengthen its reputation in embedded banking and open up a wellspring of insights into consumer preferences.
The benefits of choosing the right testing partner
It’s one thing to enter a partnership, but quite another to ensure that partner is capable of meeting your needs and standards. This is where testing technology comes in, and getting it right is an essential part of ‘Unlocking the future’ of banking.
Financial institutions with multiple departments, often on different continents, really benefit from testing technology that cuts through silos to deliver organization-wide simulations and certification.
Testing should be an ongoing process, continuing after products have launched. But above all, though, in today’s complex banking environment testing technology needs to be platform agnostic and able to work with old and new.
The key ingredients of an effective open banking strategy
For many financial institutions, transferring the delivery of critical functions and products to external organizations represents a huge culture shift, one which is fraught with potential danger. However, it is now an unavoidable part of operating a bank in the digital age. With the right strategy in place, risks can be managed.
In fact, we have reached a point in financial services where the bigger risk comes from not engaging with open banking. In this era of fast innovation, no one can afford to be late to the party.
With that in mind, a key recommendation of Unlocking the future, An innovator’s guide to open banking is to develop an implementation plan built around swift execution of product launches. Other strategic advice includes considering how to engage non-financial platforms (just as Lloyds Banking Group has done with Caura), and reviewing how to offer BaaS solutions commercially.
Naturally, this is merely a taste of Unlocking the future, An innovator’s guide to open banking. Download the white paper today.
For further information, contact Iliad Solutions today at: firstname.lastname@example.org