You are here: Home - News -

Open Banking: ‘It promises to be biggest improvement for customers since the cashpoint’

by: Strategy and marketing consultants Simon-Kucher
  • 10/07/2018
  • 0
Thursday 13 July marks six-months since Open Banking was introduced, with the government aiming to dramatically increase competition and ensure a much better experience for the UK‘s current account holders.

“While the results so far for customers are yet to be dramatic, that is hardly surprising as it is such a major and complex change, with many banks initially struggling to comply let alone use the changes to their advantage.

However, internally there has been a lot happening,“ says Gianluca Corradi, the head of the UK banking practice at pricing specialists Simon-Kucher.

He added: “Overall Open Bank has been a very good regulatory-driven initiative and the best is yet to come. I am sure over the coming years its impact on customers will be profound and positive, the biggest improvement for bank customers since the introduction of the first cashpoint in 1967… and maybe it will prove even more profound.”

Simon-Kucher is working with numerous banks and fintechs in the UK to help them devise and successfully deploy new services enabled by the Open Banking initiative. It expects many new innovations to be going live in the autumn.

Gianluca Corradi added: “Previously everyone involved at the big banks were panicking as the regulation forced a big rush to comply. Now bank management is able to think ‘Is there more we can do? How can we benefit from this strategically?’. There are now a lot of strategic initiatives underway and we can expect to see new developments from the major banks from the autumn onwards.”

He added: “Open Banking is already leading to more competition overall and a faster pace of innovation at the established banks through them now facing a much greater fintech threat, which is becoming ever stronger. As an example of how it has speeded up innovation in the large banks, for instance HSBC recently launched Connected Money app, which allows you to see your accounts at up to 21 big banks in one place.”

“The established banks are well positioned to keep their overall leadership of the market because they have been investing. They may be moving at a slower pace than the fintechs, but there is an inherent inertia in the market, which prevents sudden changes in market share.

“The difference in a few years won’t be between big banks winning or fintechs winning and vice versa, it will between which banks and fintechs invested successfully in becoming the most customer-centric and those that that didn’t and lost.

“For those brining initiatives to market in the autumn and 2019, it’s crucial they start thinking right now about how they can monetise their new solutions. One thing is to get “reach” with the new solutions, the other is to plan how to get “rich” with the value provided to the customer. Monetisation is a key building block for the success of this whole venture and often businesses leave it too late and fail to generate profitable revenue from market-leading innovations.”

Simon-Kucher & Partners are strategy and marketing consultants.

 

There are 0 Comment(s)

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.
Read previous post:
Borrowers pay up to £6,500 by sitting on SVR – Legal and General Mortgage Club

Borrowers on a Standard Variable Rate (SVR) mortgage could save up to £6,530 by remortgaging to a new deal, research...

Close