Open Banking PTBR

Banks must view APIs as a new form of distribution channel Ultimately, banks must come to view APIs not as a side initiative to the wider organization, but as a new form of distribution channel. As a result, third party developers must also be treated as a new customer base, with the necessary attention to their needs and expectations. Competing in this new ecosystem will require banks to make strategic investments in a number of areas. Ensuring rapid access to the data in core systems and high API availability are only pieces of the puzzle; the capabilities to rapidly design, build, test and deploy new API-based services will be fundamental. Alongside these areas, security (including managing customer consent), governance and analysis of performance will also be essential components of an effective API strategy. Banks focused on deploying commercial APIs (those that can be revenue generative) must also invest in the developer experience in order to ensure that innovative new propositions are available to their customers. In addition to easy-to-use developer portals and wider support services, consideration must be given to how and when pricing and formal contractual arrangements are put in place as developers move from test towards launch and commercialization. Open banking is poised to re-draw the competitive landscape of the future. Those banks that invest in their capabilities will position themselves well to remain as strong consumer-facing brands. There will be those that choose an alternative path, and aim to act as a supplier to third party players, and both of these are viable strategies. The pain will be felt by those banks that do not change at all; just as there will be winners from open banking, there will also be those that lose.

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