Open Banking should be a “catalyst for greater Customer Experience” rather than a hindrance for the UK’s banks, it has been suggested as one of the biggest personal financial shake-ups in recent years gets underway.
From January 13, customers are able to share their personal financial information with firms other than their bank, with the aim of allowing them to seek better deals on mortgages, overdrafts, and other services.
The changes are being overseen by the Open Banking Implementation Entity (‘OBIE’), which was established by the UK’s nine largest banks following an investigation into banking by the Competition and Markets Authority in 2016.
Despite the clear advantages of the reforms – that are designed to modernise banking and ease the grip on the market held by older, larger banks – concerns remain, even among customers, about the risk to data privacy.
But by putting personal financial data back into the hands of customers, many agree that open banking has huge potential for customers.
As for the banks themselves, the changes should not be viewed as a threat, but as a chance to boost Customer Experience and grow the number of people using them to manage their finances.
This view is posited by Andrew Stevens, Global Banking Specialist at CX solutions firm Quadient.
“Looking at the open banking revolution in one way, it can represent a real threat,” he told CXM.
“However, it shouldn’t be seen as a negative development. Banks should see this as an opportunity for change e.g. as the spur for providing great customer communication. Banks need to engage and have a conversation with customers on their terms; providing the right message, at the right time, over the right channel.”
Nine UK banks must comply with the new banking rules, which will be fully implemented by March. They are: Lloyds, Santander, Bank of Ireland, Barclays, HSBC, RBS, Danske Bank, AIBG, and Nationwide.
Explaining how banks should progress in the Open Banking era, Andrew Stevens added:
“There are three steps that banks should follow to set themselves up for successful conversation with customers: avoid reinventing the wheel by taking stock of the communication tools they already have in place, break down barriers between channels and departments, and finally make sure that there are no hitches when new communication methods are implemented.”
“It would be easy to see the new measures as time of hardship. Instead, banks should it as a catalyst for greater Customer Experience.”
Meanwhile, the reforms could potentially place the UK at the forefront of international banking, according to Obie Trustee Imran Gulamhuseinwala.
“The work we are doing here is genuinely world-leading,” he explained.
“The UK is the first nation to implement a standardised Open Banking solution. In the UK we are creating a single technology standard enabling new services to be easily built and offered to consumers and small businesses. Open Banking will help make Britain one of the best places in the world to bank and will, in time, stimulate the digital economy.
“While the UK is leading the way, we are incredibly excited at the opportunities created by working with peers around the world, and in Europe in particular. We are in active discussions with several groups seeking to build standards and we look forward to that work bearing fruit in 2018.”