#China will move to an open market for financial services, allowing international financial firms to have more access into the country’s economy, Zhu Guangyao, China’s vice finance minister said today. The country’s new regulatory stance will #remove #foreign #ownership #limits on #banks. China will also allow international firms to take majority stakes in other companies, […]
Bank Innovation
The #National #Bank of #Australia (NAB) will create 600 new #technology jobs. This announcement comes just a few weeks after the bank said it was cutting 4,000 jobs. The new job additions will help the bank build its #tech presence in order to efficiently #compete with the burgeoning #fintech #industry, NAB said. According to reports, […]
Bank Innovation
EXCLUSIVE—If fintechs want to land a successful partnership with a financial incumbent, understanding the regulatory atmosphere of the industry is crucial, Steve Smith, CEO of #Finicity, told Bank Innovation. When it comes to collaboration with FIs, Smith said, showing a willingness to work within, or at the very least a willingness to grasp regulatory principles, […]
Bank Innovation
#Goldman #Sachs CEO Lloyd Blankfein is the #latest banking executive to raise concerns over #bitcoin, as the #currency shot down #below its previous high of $ 7,000 today. Blankfein said “maybe bitcoin is kind of a #bubble” in an interview with CNBC, stating that he was “not comfortable” with the currency. Blankfein’s comments are in line […]
Bank Innovation
EXCLUSIVE- Is the #prepaid card market saturated? Not quite, based on insights Sue Brown, director of prepaid debit advisory service at #Mercator Advisory Group shared with Bank Innovation. “In 2018, we will likely see #fewer #cards, but an increase in dollar loads,” Brown told Bank Innovation. According to a recent Mercator report authored by Brown, […]
Bank Innovation
#Blockchain and artificial intelligence are common themes in #fintech, including at this year’s Accenture #innovation lab in #Hong #Kong.
Financial Technology
EXCLUSIVE—#SegWit2x, a controversial change to the #bitcoin #blockchain, will no longer happen, bitcoin holders and #cryptocurrency enthusiasts found out yesterday. Aside from the initial shock, bitcoiners seem to be #fine to wave goodbye to SegWit2x. Some even seem to be celebrating, at least according to Twitter: ?ALERT? Our wish has come true! #NO2X !!! The […]
Bank Innovation
EXCLUSIVE – After its recent partnership with digital product Innovation Company Stuzo, #Bank of #America’s #merchant services business is laying the #foundation for an innovation lab. “It [the partnership] helps us have a conversation with our merchants about their overarching goals,” Michael Roberts, chief marketing and digital strategy officer of Bank of America Merchant Services […]
Bank Innovation
EXCLUSIVE— Online lender #LendingClub Corp. reported revenue at an all-time high, growth in loan originations, and declining losses during its third quarter earnings yesterday, but its guidance for the fourth quarter has sent its stock plummeting. LendingClub stock fell 22% in the hours after the company’s earnings call. The decline comes after the company’s CFO, Thomas […]
Bank Innovation
When it comes to #Open #Banking, regulatory, technological and competitive pressures are forcing #banks to confront the choice posed by French critic, journalist and novelist Alphonse Karr: “We can complain because #rose bushes have thorns, or rejoice because thorns have roses.”
Recent Accenture research indicates that banks in Europe (where Open Banking is being mandated) and in North America and Asia Pacific (where, at the moment, it is optional) appear to be choosing to admire the flowers.
Our recent poll of 100 payments executives suggests that banks are seeing the opportunities inherent in allowing customers to share access to their financial data (such as bank account balances and transaction history) with non-bank third parties, so that those third parties can then create apps and services in which banking is embedded. Ninety percent of respondents expect Open Banking to boost revenues by up to 10 percent. Nearly two-thirds of North America banks say that implementing Open Banking is critical to remaining relevant and competing with new entrants, such as fintechs and tech giants like Google, Apple, Facebook and Amazon. A minority of banks (37 percent in North America, 29 percent in Europe and 23 percent in Asia Pacific) already distribute banking products through third parties to consumers with whom they do not have a primary relationship, although these are often through traditional distribution partnerships rather than digital embedding.
Yet like a rose bush, Open Banking also comes with some thorny threats. Half of the banks are concerned that Open Banking will make them more vulnerable to security breaches and fraud, because banks must expose their proprietary software and application programming interfaces (APIs) to allow outsiders to integrate their services. This concern is particularly prevalent in Europe, where nearly two-thirds of banks think Open Banking will increase risk; a point maybe not unconnected with the new European GDPR data protection regulations and the stiff fines that will be levied for breaches. The other risk posed by Open Banking is a business one, and is the concern that banks will become commoditised product providers with their transactional services and their brands buried deep in transaction flows controlled by non-bank competitors.
Banks can turn Open Banking to their advantage, and are likely to see revenue decline if they adopt just a basic compliance mentality. But doing so depends on how they look at it: as a #thorn to their existing value chain that they must minimise or avoid, or as an attractive new path to new products and services, incremental revenue streams, and a better experience for their customers. Done correctly, banks will be able to admire a glorious bouquet of roses at the centre of their business, rather than continually hunting for Band-Aids to stem the bleeding from pricked fingers.
I invite you to read more about our survey findings.
The post Banks decide whether Open Banking will be the rose or the thorn appeared first on Accenture Banking Blog.
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