Global banks expect the future of banking to feature increased sharing of client data with outside firms, which bankers believe will enable them to better compete with fintech firms and technology giants in providing digital banking services, according to a new report from Accenture.
The global consulting firm reports that its online survey of 100 payments executives at large banks around the world in August found that almost all are expecting to embrace increased sharing of customer data with third-party firms as they seek to develop digital services. Accenture reports that almost all the executives surveyed said their bank plans to “make major investments” in so-called “open banking” initiatives by 2020.
In Europe, the shift to open banking is being driven by regulations, which take effect in January 2018, “that will enable consumers to share their financial data securely with banks and third parties, making it possible for them to more easily transfer funds, compare products and manage their accounts without their bank’s involvement,” the Accenture report notes.
Although regulation is driving adoption in Europe, that Accenture report says that market competition is pushing North American banks to consider open banking. Specifically, the survey found that 63% of banks in North America believe that implementing “open banking” will be critical to competing with fintech firms and tech companies for the future of banking.
In addition, the report found that 52% of bank executives indicated that they will be “forced to implement open banking in order to compete with traditional competitors (i.e. other large banks) that have invested in digital transformation.”
The research also found that 66% of executives expect the emergence of open banking to help create new revenue streams and 90% expect it to drive incremental revenue growth of as much as 10%.
“Most bank executives surveyed believe that open banking provides more an opportunity than a threat and makes it easier for consumers to access their products,” the Accenture report states. “However, many also believe that open banking will introduce more interfaces, leading to potential security and fraud vulnerabilities.”
“Open banking provides myriad opportunities for banks to generate new revenues and offer new products; however, it also puts banks at risk of becoming back-end, transactional players, with their products and brands buried deep in another transaction,” adds Alan McIntyre, senior managing director with Accenture and head of its banking practice. “Banks have an opportunity to use their trusted position with consumers to own the customer relationship, and provide the seamless digital experience customers want and that open banking enables.”
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