Citi Ventures‘s recent investment in Anaconda, an Austin, Texas-based AI and machine learning (ML) software company, shows the industry’s commitment to staying at the forefront of this growing and developing field. AI has certainly generated a lot of chatter and buzz in the financial world, but #banks are still challenged to implement it properly. Citi […]
Bank Innovation
The Turritopsis dohrnii, commonly known as the immortal jellyfish, is an extraordinary survivor. Through the rare, natural transformation of cells, an adult can revert to the polyp stage at any time—essentially being reborn as a young jelly.
The #Open #Banking trend is beckoning traditional vertically integrated #banks toward a similar transformation, where they can hit the reset button on their business models to pursue new opportunities, grow their business and guarantee their continued relevance. Driven by regulation, competition—or both—banks are increasingly using APIs to make certain customer data available to third parties. Those third parties can then embed that information into their platforms to improve offerings (theirs and, often, the banks’) and benefit end customers. This reciprocal exchange is causing a rare, natural effect: #bilateral #trading that can fuel a rebirth in banking.
On the outbound side, banks become exporters of not only customer data, but also bank-owned algorithms and business processes. It also positions banks as advisors to help create new products and services that help third parties and consumers capitalise on bank exports. By enticing and training developers to use their API-delivered component services, for example, banks can offer existing customers new services like single sign-on, the ability to pay with credit card reward points, and open accounts right from third-party sites. Consider how Mint.com is extracting and consolidating customer account information to help consumers organise and manage their personal finances. Mastercard is unbundling its services, like consumer credit check or identity management, and offering them to fintechs and other banks. Through such exports of information and services, banks can amplify their reach, distribution and customer loyalty.
On the inbound side, banks can easily and meaningfully plug-and-play product and service features from third-party partners into their own customer-facing offerings. By doing so, they can embed themselves in more transactions—from banking products they don’t already offer, to home, auto, consumer goods purchases, travel and other non-banking services. Through its partnership with OnDeck, for example, JPMorgan Chase offers small businesses loans that lie outside its traditional risk appetite. Even new challenger banks like Starling in the UK are adopting a marketplace strategy, where they offer third-party products on their app, in addition to their own current accounts. The extreme version of inbound open banking would be to only offer third-party products, making money from orchestrating a full platform-based business to improve customer service, build customer loyalty, generate new fees and lower operating costs—without the ‘bank’ having its own balance sheet.
More and more bank executives are seeing Open Banking as an opportunity rather than a threat. But seizing that opportunity requires mastering both the art of interdependence and bilateral trade. It requires investing to regenerate the bank and open up to third parties, creating value from both export and import flows, and differentiating the brand within and beyond financial services.
I invite you to read our report, The Brave New World of Open Banking, to learn more.
The post Banking born again: The power of Open Banking bilateral trading appeared first on Accenture Banking Blog.
EXCLUSIVE—#Cloud infrastructure and data analytics are becoming more and more integral to financial services, and #Capital One is one bank ahead of the curve. “We are a very data-driven company, we want to bring the bank to the customer,” Linda Apsley, vice president of data engineering at Capital One, said of the bank’s use of […]
Bank Innovation
It’s all about the data. SaaS banking #platform #Mambu is paying close attention to one important trend in the #fintech market when it comes to their growth strategy, according to its CEO Eugene Danilkis: “Interestingly, we are seeing more and more non-financial or non-fintech related institutions getting into this space because of their access to […]
Bank Innovation
#Bitcoin is notoriously volatile, making it dangerous to use it as a currency. That fraction of a coin that buys you a pizza this week might bring two the next (though you would starve if you waited that long.) Bitcoin’s value began 2017 around $ 430 and is now around $ 960. ThisRead More
Bank Innovation
Cryptocurrencies aren’t just an #experiment in monetary theory, but also a radical experiment in decentralized #governance, says Ariel Deschapell.
CoinDesk
Cryptocurrencies aren’t just an #experiment in monetary theory, but also a radical experiment in decentralized #governance, says Ariel Deschapell.
CoinDesk
We’ll say this: #virtual #reality #trading looks cool. Citigroup released a #video earlier this week that #shows the potential (tremendous) #power of virtual reality to present data for trading. The example used is a trader at a workstation with a massive monitor — the #technology could equally be used with mobile devices &8212;Read More
Bank Innovation
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