The future of financial services is under pressure from profound digital disruption. Across the globe, there are forces, both regulatory and customer-led, that open up the market to new entrants and disrupt what customers are buying — and how. The advent of Open Banking is one major influence, with Open APIs paving the way for third-party developers to build applications and services independently.
This whitepaper outlines the challenges facing financial services firms and how a new approach to enterprise integration can help banks and financial services firms not only survive, but thrive in an increasingly competitive future.
Open Banking and the Future of Financial
Are you a survivor or thriver?
Setting the scene
Every day there is a new article that discusses the sea change
disrupting the banking industry. This change, they say, will
fundamentally disrupt the financial services value chain for
customers, intermediaries, and incumbents alike. There is no
avoiding the signs.
Across the world there are pressures, both regulatory and
customer-led, that are opening up the market to new entrants
and disrupting what and how customers buy. In Europe
specifically, the Revised Payment Services Directive (PSD2) is
set to unleash a transformation in how financial services
organizations view themselves, and each other. This isn’t
unique to Europe - in the United States, aggregators such as
Mint.com have already dis-intermediated banks and now own
the ‘last mile’ of the customer banking relationship, disrupting
The success of Mint.com in the US highlights the appetite from
consumers for account aggregation, or Account Information
Service Providers (AISPs), in PSD2 language. Starting in 2006,
it now says its customer base for its aggregation and personal
finance services is over 10 million strong. Traditional banks are
already feeling the competition with a number of high profile
temporary bans on access to data from such services. Under
PSD2, in Europe, this ban would not be legal; it’s only a matter
of time before other global markets follow this route.
PSD2, through both intermediating and dis-intermediating the
bank, provides a legislative mandate for more open data and
an increased open data interchange between financial services
organizations. By January 2018, European banks must provide
access to customer information (e.g. account balances and
details) to AISPs, introducing another entity to the customer
relationship. In addition, banks must expose customer
information and payments services to Payment Service
Providers (PSPs), dis