#Fintech startups, particularly neobanks, have long suffered from having great #technology, but few #customers using it. Simple and Moven had more innovative offerings than traditional peers, but that didn’t translate to more customers or more revenue. What was BBVA paying for when it bought Simple for $ 117 #million in 2014? It wasn’t the customers, which […]
Bank Innovation
The impending arrival of #Open #Banking in Australia may not be news to many in the financial industry. But judging by research we conducted recently, it certainly is to everyday consumers. Of the approximately 2,000 consumers we surveyed, a mere 17 percent were aware the government is implementing new Open Banking laws that will allow them to grant more third parties access to their financial information.
The poll also showed consumers are concerned about the management of their money and financial data, and that although the whole idea of Open Banking is to have more of that data flowing to companies outside the financial sector so they can use it as a building block for innovative consumer-led products and services, people aren’t necessarily inclined to let that happen in practice. Just 17 percent said they would be willing to share banking data with non-bank third parties—even if they would benefit as a result.
All this may seem like a pretty grim indictment of an initiative that’s less than a year away and supposedly destined to reshape the financial landscape. The data certainly indicates there’s some work to be done in terms of educating consumers about what Open Banking entails and its implications. It may even cause some bankers to throw up their hands and wonder whether the whole thing is worth the effort, or dismiss Open Banking as just another regulatory box to tick. But that would be a mistake. And here’s why.
Australians may be deeply protective of their financial data—but they also seem to trust their #banks with it more than anyone else. Over 80 percent of those surveyed said they would only trust their bank with their financial data, and just 20 percent said they would be open to giving that data to a #start-up, a large #technology company or a retailer—again, even if there were an incentive to do so.
Be that as it may, many of these companies will be watching Open Banking closely and looking to develop exciting new products and tools that take full advantage of the new regime. Those products and tools may run up against consumer resistance initially, but if there’s one thing consumers value as much as security, it’s convenience. This is particularly true of an emerging category of banking customer we call the ‘Nomads’: digitally savvy, demanding and accustomed to getting services on demand. These are the needs third parties will be looking to meet—and that banks themselves will increasingly have to deliver on in the future.
The relative trust that banks enjoy—and the fact that consumers may be slow to share their data with other organisations—gives banks a solid head start in the race to innovate on the back of the data Open Banking makes available. It’s up to banks to maintain and build on that lead by quickly developing targeted, on-demand services that address real customer pain points. Failing to act on the possibilities of Open Banking will eventually result in those customers—and their data—migrating elsewhere.
Of course, not all Open Banking-based experiments will succeed. But with other organisations trying, and change all but inevitable, a certain degree of boldness is required. Banks shouldn’t be afraid to try, test and fail. These are exciting times for the industry—even if most Australian consumers don’t know it yet.
Accenture at Sibos
We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.
The post Open Banking: defining moment or doomed from the start? appeared first on Accenture Banking Blog.
#Fintech funding this year has been on the rise. In the second quarter alone, funding for financial #technology companies around the world reached $ 20.3 billion in nearly 400 deals. Right now, venture capital firms, #banks, and investors are pouring funds into companies Artifical Intelligence, the clear flavor of the year. But AI means more than chatbots […]
Bank Innovation
Today #Finastra announced a partnership with Wis.-based #Unity #Bank for a #digital #loan solution. Unity Bank, with $ 450 million in assets, has begun to leverage loan #technology to streamline its commercial lending and consumer lending processes. Bank Innovation spoke with Unity Bank senior vice president and commercial lending manager Darrin Wilson on what “streamlining” will mean […]
Bank Innovation
In the post-financial crisis era, European #banks have sought new avenues for profitable growth. There has been an emphasis on finding ways to grow without taking on the types of trading and financing risk that got so many banks in trouble in 2007 and 2008.
Private banking (or #wealth #management) seems like an attractive area of growth for many banks. The Allianz Global Wealth Report for 2017 points out that the financial assets of households in Western Europe grew by 4.7 percent to a total of EUR 35.3 trillion during 2016, the latest year for which such numbers are available.
The private banking market, however, presents banks with significant barriers to entry. Private banking relationships are “sticky” and are often built on long-term, multi-generational interaction, along with considerations such as reputation and brand image. New entrants may find it hard to take share from established competitors.
But, increasingly, private banking clients have the same concerns as other bank customers do. They travel frequently, are short of time, and have become accustomed to using digital financial services. We noted in a recent report that, among High Net Worth (HNW) and Ultra-High Net Worth (UHNW) customers, 70 percent use digital financial services and 85 percent use at least three mobile devices. More than 40 percent said they were open to using mobile #technology to check their portfolios and receive investment-related information.
Digital solutions—including well-designed mobile apps—can help banks “take the office to the client.” For example, banks using digital solutions can see where clients hold other accounts, or they can readily check whether the client uses other bank services such as business accounts or foreign exchange.
Such solutions will not replace the private banker but can help private bankers build relationships and expand service offerings. More importantly, such solutions have become essential to the kind of hybrid advice and digital wealth management that clients are now seeking.
The wealth management market is both dynamic and competitive. Traditional banks are fighting for share with new entrants using digitally disruptive technologies. In our view, private banks combining investment expertise with new digital and mobile approaches will be well-positioned, not only to keep existing clients but to add new clients who want both connectivity and personalized advice.
In my next post I will look at some of the features of a first-class mobile app for wealth management.
The post Going digital—and mobile—in wealth management appeared first on Accenture Banking Blog.
It might seem like #blockchain has been all the rage among #banks and #fintech companies, but a recent Bank Innovation poll found that many of these companies don’t have any blockchain projects in the current pipeline of their innovation initiatives. When asked to describe their company’s involvement with blockchain #technology, 30% of the poll-takers said […]
Bank Innovation
Many large #banks describe themselves as equal parts #technology firms as they are financial services companies, but then shouldn’t they have relevant patents backing that notion? Well, they don’t. In fact, a new report showed that technology company IBM has five times more #fintech patents than the world’s 15 largest banks combined. The report, released […]
Bank Innovation
Countries with centralized #FinTech #regulation can provide more support to innovative firms than the U.S. with its fragemented governance.
Financial Technology
#Zelle made a difference to the bottom line of financial #technology provider #Fiserv, the company reported on its earnings call yesterday. “P2P transactions, including Zelle, grew nearly 30%,” according to Fiserv CFO Robert Hau. It was also noted that several #banks — Fiserv serves some 13,000 financial institutions &8212; saw a #boost in transactions due […]
Bank Innovation
Internal proprietary #software to meet regulatory requirements is #eating up bank IT budgets.
Financial Technology
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