Open banking gains momentum
As open banking gains momentum, the future of the industry will see a move away from product offerings in favour of customer experience and engagement, a panel of industry experts told a Temenos conference.
The panel of experts told the conference that technology has placed the industry in a constant phase of reform, and the move to open banking would see a significant shift away from the big four banks to address the needs of underfunded sectors like small and medium-sized enterprises (SMEs).
Piers Balmer from business lending funding service for SMEs, Judo Capital, said they no longer used the term ‘product’, and instead opted for terms like ‘engagement’ and ‘consumer experience’ in a bid to put the focus back on the consumer and stray from the industrialised lending service model adopted by bigger banks.
David Lochrie, general manager of digital and integration at ME Bank, said technology had transformed the bank from its core to drive efficiencies and deliver better priced offerings, removing most of the “heavy lifting” and allowing for improved customer outcomes.
When asked if customer privacy was an unavoidable casualty as open banking approaches, the panel said revolutionary technology like smartphones had forever changed the landscape of the banking industry and security needed to step up accordingly.
Host and associate editor of Banking Day, George Lekakis, suggested the major banks would be “dragged kicking and screaming” as open banking takes over, and while most of the panel agreed, they said the banks would be preparing nonetheless.
While the Australian Prudential Regulation Authority (APRA) suggested that open banking would officially be in place by 20 July 2020, the panel was hesitant in placing a rigid date on its implementation, and preferred to say it was simply “coming”.
The panel concluded their outlook by providing that the industry looked to become more customer-centric with more consumer choice as products became simpler.
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