You are here: Home - News -

Open Banking and tech revolution to spark market transformation – EY 2018 forecast

by:
  • 14/12/2017
  • 0
Open Banking and tech revolution to spark market transformation – EY 2018 forecast
Lending and the wider banking industry will be revolutionised by the arrival of major regulatory and technological change in 2018, including Open Banking and GDPR, according to forecasts from experts at accountancy firm EY.

The coming year will be a “critical” for regulation, EY has predicted, as Open Banking allows third parties to access consumers’ banking information, while GDPR gives people greater data protection, among a host of binding rule changes.

At the same time, investment in digital change is forecast to ramp up in 2018, as banks adapt to the shifting landscape.

The likes of Artificial Intelligence (AI), robotics and advanced analytics will sweep through the market in a torrent of technology-led disruption.

As a result, the UK banking industry will next year lead the charge into “the heart of the digital economy” – and the European Union (EU) will be watching closely, EY added.

Dan Cooper, UK banking leader at EY, said: “Open Banking is only one part of the technological revolution sweeping across the industry.

“In 2017, both retail and investment banks increasingly adopted new technologies, for example, Robotics Process Automation (RPA) to reduce costs across front, middle and back office functions.

“The pace of disruptive change will only increase going forward, and this will be very much a theme of 2018, as the adoption of other emerging technologies like AI, advanced analytics, Cloud, and machine learning start to really help banks achieve their strategic objectives, while also safeguarding them from new cyber security threats.

“The impact of new regulation may take the headlines next year, but 2018 may also mark the real beginning of an innovation-led recovery for the sector.”

 

Critical to plan for disruptive forces

Firms were warned that planning for the looming changes is essential.

A scramble to adapt to new regulation is now underway, according to John Liver, banking partner at EY.

He said: “We are observing heroic attempts across the industry to become as compliant as possible ahead of January, but given the scale of the regulation and the lateness of some key guidance, there will clearly be work to do in the first half of 2018.

“Some – but not all – regulators have recognised the reality of this and are looking to take a pragmatic approach to assessing compliance, so long as firms are continuing to progress with urgency and focus.”

Open Banking and PDS2 could combine to create a new competitive landscape in retail banking, Liver added.

He said: “Both incumbent banks and new players are developing their responses, which will go live in 2018.

“Consumers’ early experience of new service offerings, and their related security, particularly as GDPR increases the potential consequences of error, will be critical to building confidence.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
interest rates
MPC votes unanimously to maintain Bank of England base rate

The Bank of England's Monetary Policy Committee (MPC) has voted unanimously to maintain base bank rate at 0.5%, amidst a...

Close