The arrival of open banking will (eventually) prompt both entirely new services and major enhancements to existing services. Louise Beaumont, Co-Chair, Open Bank Working Group at Tech U.K. tells us what this means.

For banks, combining data through APIs will allow them to improve customer experience hugely for processes such as account opening, AML checks and product application processes, where personal information can be pre-populated and information verified from official sources.

But that is an iterative version of today. Where Open Banking gets interesting is looking beyond ‘banking’ to where non-banks start to play. Once payments services providers have access to transaction data, they will be able to anticipate when customers are likely to need a short-term line of credit and offer their service as an alternative.

By reacting defensively and doing no more than comply with the minimum mandated standards for the Open API, some banks will hope to do as little as they can to speed the flow of data out of their organisations, and therefore to carry on as far as possible with business as usual – in a market that is undergoing fundamental change.

This is short-sighted. Assembling richer pools of data from multiple sources will give banks more angles from which to view their customers and more ways to understand them than they could gain just from transactional information. They could profile and segment their customers more precisely and look for behavioural patterns that can be used to refine predictive models. The insights they gain will power new services and improve existing ones within their own defined and manged ecosystem.

One set of potential competitors in the open banking future, the tech titans, excel at this; assembling and analysing data, at scale, as a matter of course. Companies that have data at their heart are getting perpetually smarter because they’re building ever-deeper layers of data. It allows them to make behavioural inferences that enable them to build more predictive, pre-emptive and personalised services.

Banks that choose to engage fully in the new market based on open data will focus on the element of their environment that they can control: which organisations they choose to collaborate with to create new services based on pooled data.

These will be partnerships of mutual advantage, with the potential to create new sources of profit for both parties that will be shared between them. Banks cannot expect to generate all the business ideas themselves that combining data sources will make possible. Success will come from the ability to collaborate most effectively and be open to ideas from outside.

In this new world, the banks will succeed by finding the best fit between their data and that held by other organisations, whether mobile phone companies, energy providers, transport companies, airlines or any number of others. But to succeed in the competition to collaborate most effectively, banks will need the best possible tools for data sharing and analysis. An Open API that complies with the minimum required standard will not be good enough.

What will set the winners apart is the extent to which they go beyond that and actively seek commercial partnerships based on data-pooling. That requires a different mentality: one that sees open data not just as an obligation, but also as an opportunity to learn and find new sources of value.

---

Dr Louise Beaumont

Open Bank, techUK & Open Bank, SapientRazorfish

Dr Louise Beaumont creates markets, enables scale, and drives growth.  She is particularly interested in the intersection between technology, financial services and public sector; and has worked with start-ups, investors, blue chips and everything in between to grow companies and create value.

FinovateEurope is bringing you more this year. In addition to two days packed full of demos, we’ve added two days of discussion that will help you not only digest the new innovations, but also bring an analytical perspective from top industry leaders on key fintech trends and issues.

It’s all happening March 6 through 9 at ExCeL London (register today). To help you curate your schedule, here’s a list of the top themes you can expect to see at FinovateEurope:

Geopolitics

We’re just days into the new PSD2 environment, and that’s only one of many geopolitical changes impacting banks and fintechs alike. GDPR and MIFID II, along with yet-to-be-seen influences from Brexit will all take their toll this year. Hear what experts have to say about these and other international regulations, and what types of regtech solutions can help.

AI

AI has proven to be one of the hottest issues in fintech and is sure to pulse throughout discussions this year. Learn what the industry’s top influencers have to say about the topic, along with how it will tie in with deep learning, machine learning, and new credit scoring techniques.

Security

This ever-present fintech topic grows new meanings and nuances each month, as hackers become more sophisticated. Hear why technologists say you should be afraid (very, very afraid) and what you can do to prevent a security breach.

Investing

After the robo advisor craze of 2014 and 2015, it’s time to take another look at this space and explore the newest emerging investing technologies, such as quantum computing, and how they can revolutionize you and your clients’ portfolios.

Banking

These sessions will go beyond a web and mobile banking toolkit. See what’s new in digital banking, hear how challenger banks are changing the game, and what you can do to compete.

Blockchain

Bitcoin may be on the downtrend but the blockchain is just getting started. Learn about how your firm can leverage the blockchain beyond payments.

Payments

It’s not only payment types and user experiences that are changing. Digital giants such as Apple, Facebook, Amazon, Alipay, and Tencent have entered the game and competition has never been more fierce.

Lending

Check out the new alt-lending landscape and see how some of technology’s biggest players such as Apple, Facebook, Amazon, Alipay, and Tencent are making changes to consumer and small business lending.

IoT, AR, and VR

These once-futuristic technologies are making their way into the mainstream– and quickly. Hear suggested timelines and how to prioritize these non-essential user experience channels.

---

Additionally, scattered throughout the sessions will be highlights such as:

• Presentations from analyst all-stars
• Discussion with industry leaders on seizing the fintech opportunity
• Pitches from fresh startups
• Where’s the VC money going in fintech?
• What’s next?

And don’t forget the demos. If you still haven’t checked out our lineup for the first two days, be sure to visit the FinovateEurope website to learn more about the companies that will demo their newest technologies on stage.