Open banking enables customer financial data, including transactions and payment history, available to financial service providers and third-party payment services. While this approach focuses on improving new financial services and products and ensuring transaction security, adoption is heavily reliant on a positive customer experience.
Open Banking Implementation Entity (OBIE) established the Customer Experience Guidelines which are intended to make it easier and safer for people to use products and services that support Open Banking. It combines the regulatory requirements and customer insights to create the Standard for TPPs and ASPSPs.
Open Banking regulation has made a significant revolution in the payment services industry, not only from a compliance perspective but also bringing a better experience to the customers. It mandates that banks develop APIs for digital banking transactions that can be used by value-added revolutionary service providers to inculcate competition and innovation among financial institutions across the industry. Open Banking also aims to prevent customer lock-in by standardising account switching capabilities and simplifying payment processing.
Customers are now exposed to a new business model where they must consent for their financial information to be shared with third parties. They can only consent if they feel well-informed, safe, and in charge throughout the entire process.
Open Banking builds healthy competition in delivering a better customer experience
The opportunity to create better customer experiences has been made possible by open banking. As per recent research, well-established or traditional banks are falling short in the eyes of customers when it comes to customer experience. However, smaller, or new banks are excelled in offering a better customer experience.
Customers laud the more niche digital banks for their user-friendly online services, appealing products, and superior customer service in general. But the gap is not caused by products or attractive interest rates. Existing banks are capable of matching both.
Customer service and digital transformation are more highly linked. With the rise of newer technologies such as mobile, big data, and enhanced real-time analytics, businesses can now create new, personalised offerings for their customers and prospects. Achieving customer expectations today includes intuitive user interfaces that allow them to accomplish their desired tasks quickly and easily across multiple devices, as well as customized value-added services based on their specific needs, backed by data and advanced analytics that offer useful insights and recommendations.
They are more customer-centric and provide a more consistent, convincing experience for the end-user thanks to the resulting agility and decreased costs of change that allow them to move quickly from idea to reality.
Traditional banks may be compelled, in the face of increasing competition, to concentrate on enhanced user interface design, giving current services slick interfaces. Customer experience, though, goes beyond the surface.
Behind appealing interfaces, a truly connected enterprise beats at the core of an intriguing customer experience. A customer journey is made or broken by the seamless integration data model and the aligned business process. Customers who self-serve and a hyper-enabled customer support function are simultaneously created by giving internal staff and customers access to the information they need when they need it.
The reliance on quick and unrestricted access to data will become incredibly valuable for traditional banks that are aiming to establish and defend a competitive advantage. The commoditization and implementation of advanced analytics have already spawned a new generation of enterprises known as FinTech, which leverage open APIs and standards while focusing on customer-centric innovation for new financial products and services.
Bringing Business & Technology together
With the evolution of FinTech, the effective implementation of new generation intelligent platforms improves, and the appetite for the predictive analytical techniques of the data will grow.
To deliver a superior customer experience, banks should consider all the possible architectural aspects such as processes, services, data, and technology. Customers will appreciate simple, fast, and sophisticated core services for multiple channels and user-friendly interfaces. All these actions necessitate the meticulous orchestration of architectural changes and fundamental architectural elements. This is where enterprise architecture comes into play. By connecting these touchpoints to business process models and information technology systems, the experience is optimally orchestrated and transformed to deliver targeted outcomes for customers – and results for the bank.
Open Banking fosters the banks to redesign their products and services for improved customer experience, improved processes, and faster time to market to avoid being relegated to “lowest common denominator” account servicing roles.
Simultaneously, banks can broaden their reach through fintech challengers by providing innovative API services that drive adoption in the fintech ecosystem. Adoption in the fintech ecosystem, of course, provides incumbent banks with sources of innovation through acquisition, fostering long-term growth and profitability.
Traditional banks are finally embracing the cloud to accelerate their digital transformation goals. Cloud migration is neither practical nor cost-effective. In contrast, the institutional agility and flexibility gained by embracing cloud infrastructure and services justify the required investments. Existing banks can provide new services, increased capacity, and ongoing modernization in ways that earlier attempts focused on delivering on-premises solutions could not.
Macro Global has achieved “Gold Partner” status with Microsoft. Most of our products are now being scaled up to Cloud Platforms, and customers will soon be able to upgrade to “Cloud Only” or “On-premises with Cloud Adoption” to address BCP and cost constraints. The cloud option allows our customers to pay a single set of fees for the entire solution, including hardware, operating system, Development Framework, and product, all of which are managed by us.
It’s simple to manage and scale up with the push of a button, and it’s accessible from anywhere on any device.
Accelerate IT modernisation and digitisation efforts
Open Banking emphasises transparency, security, and access, which provides banks with an opportunity to fast-track their digitization and IT infrastructure modernization efforts. Banks can compete as technology innovators by leveraging their vast resources and massive amounts of available data, using powerful advanced and predictive analytical tools to extract valuable insights. These insights can be used to broaden the service portfolio, gain more customers, increase revenue, and improve internal efficiency. Banks should focus on continuous innovation by improving technology infrastructure, introducing new processes, and optimising current processes to enable seamless customer journeys.
Macro Global’s Open Banking (PSD2) solution, Tavas enables banks to create a connected experience while also allowing them to adapt to emerging opportunities to position themselves in the new era of consumer-centric banking. Tavas – Open Banking Product Suite & Solutions instils innovation in banks by redefining account and payment aggregation via a game-changing Open Banking API Framework that addresses all compliance requirements while providing a best-in-class user experience.
Discover more about our best-in-class Open Banking solution.