Traditional banks are identifying new methodologies to compete in today's marketplace successfully. One approach that these banks are embracing is open banking that has allowed them to address the customers’ needs in a better way. Open banking securely shares data with third-party applications or consumes data from third-party sources while providing new state-of-the-art services. It enables banks to present information to their customers enabling them to make better choices around financial planning, products, and services. Banks have started to collaborate with fintechs and technology partners to make open banking a success.
The open banking business model facilitates the banks with the ability to reduce costs, grow their business, and provide an improved customer experience by utilizing third-party applications and services. A shift to open banking will not only provide banks with an improved customer experience but will also predict customers’ needs, meet regulatory and compliance standards, and enable platform-based business models.
Moving towards the realm of open banking, banks must assess their business processes and see how they can connect the channels such as transactional banking and data analytics in real time. They also need to collaborate with partners and fintechs in order to achieve growth. One of the most important factors is prioritizing the workforce and ensuring that employees are engaged in the digital transformation process.
Implementing an open banking business model is valuable as it offers functional benefits like providing customers with real-time credit scores through their existing bank accounts. Today, banks are collaborating with fintechs to develop innovative models and new ways of conducting business.
