Open Banking PTBR

3 axway.com Some conservative banks and industry analysts still want to frame fintech as being a bank's main competitors, and they lament a startup's ability to iterate quickly without the hassles of a legacy infrastructure that needs to be reoriented each step of the way (let alone the internal management processes that also slow down project approval and oversight and add months to a project timeline). Others have recognized the CX capabilities of fintech as an opportunity. They have created new partnerships to leverage partner APIs so that they can offer new services within a bank's customer-facing apps. In this way, while it is true that fintech do present some threats, partnerships can alleviate some of that risk. By far, the bigger threat to banks' incumbent positions are the GAMFA giants (Google, Amazon, Microsoft, Facebook, and Apple). These players already have a number of characteristics that pose significant threat to banks: • They have large customer bases and have already built customer trust • They regularly iterate on security and privacy, and message their customer base on their feature enhancements • They have already implemented a platform model that allows for network effects and for consumers to co-create their own value • They have payments licenses and, increasingly, are offering other financial services licenses And what's more, they are already API-literate and have dev teams working with an API-first IT architecture focus. How will banks be able to compete as GAMFA increase the financial services they offer, from payments and transfers via Facebook messaging, to Amazon merchant loans, to Microsoft loan risk modeling? The API Days Banking APIs: State of the Market Report 2017 outlined how fintech and digital banks can use APIs to compete against traditional banks. Digital banks vs. Traditional banks Customer experience is not considered a priority Fast processing times Long processing times Flexibility in pricing High rigidity in pricing Flexible IT infrastructure Rigid legacy systems High talent attractivity Low talent attractivity Mostly branchless Strong network of branches Estimated 25% cost/income ratio Estimated 60% cost/income ratio Serve the customer in the best and transparent way

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