Most Large Global Banks Planning Major Investments in Open Banking

All, but one of 100 payments executives at large banks said their bank plans to make major investments in Open Banking initiatives by 2020, according to the results of a global study by Accenture.

Open Banking is an emerging service model that allows customers to share access to their financial data with non-bank third parties, which can then use that data to provide the customer with a better banking experience. Banks can also use the Open Banking platform to offer plug-and-play financial products to third parties, such as retailers or fintech companies, ultimately expanding their reach to new customers.

“Indian banks are already using newer technologies to understand customers affinity towards a product or service. However, success of a new service is still dependent on an organizations capability to understand the data and run targeted campaigns,” said Rishi Aurora, MD and lead for Accenture’s financial services group in India.

The survey found that nearly two-thirds (63 percent) of banks in North America believe that implementing Open Banking is critical to competing with new entrants – such as fintechs and tech giants – and will help banks remain relevant, compared to half (51 percent) of executives surveyed in Europe and two-fifths (40 percent) in Asia Pacific.

In fact, half (52 percent) of all the bank executives surveyed believe that they will be forced to implement Open Banking in order to compete with traditional competitors (i.e. other large banks) that have invested in digital transformation.