Time to read: 5 minutes to gain a different perspective
// Open Banking: A Rebel Without a Cause? //
There is a heretic in our midst…
: : Is Open Banking trying to address a problem that does not exist? : :
In some quarters, Open Banking is a revolution, the start of an age in which consumers have control and choice, and one where the underdog (‘banking new entrants’) has a fighting chance to compete against the traditional actors that make up the current oligopoly.
Alternative views expressed include the notion that Open Banking is a failure in the making and is seeking to address a problem that does not exist. On balance, it is probably somewhere in the middle.
Open Banking is young; it's just a child trying to find its way in the world. Its grounding is noble, well meaning ..., it’s about individual empowerment, understanding the human and servicing complex needs.
// How Wonderful; It Is All About You - Or Is It? //
“While physics and mathematics may tell us how the universe began, they are not much use in predicting human behaviour because there are far too many equations to solve. I'm no better than anyone else at understanding what makes people tick”, Professor
Stephen Hawking. CH CBE FRS FRSA
YES, Open Banking is about you—you as an individual, as a corporation (note that corporate accounts are in scope for a Q3 2019 implementation). It's about your data within a data sharing economy. It's about trust, it’s about personalisation,
it’s about the realities of poor service and active inertia.
A few months ago, at a recent industry event there was lively debate regarding Open Banking, strategies, roadmaps, etc. However, there was little real debate regarding the wants and needs of customers, whether in terms of today or tomorrow. In reality, most
organisations do not know where their data resides; EU General Data Protection Regulation, 2018.... need I say anymore?
Therefore, providing human-centred insights and the perspectives of customer segments—including customer wants, needs (met and un-met), perceptions and opinions—may just be a step too far. Generally, across the industry, there was a real absence of human
insight into how we interact and the ingredients the banking sector requires to be in place, and maintained to develop deep and lasting relationships with its customers. All of these are essential components for designing a competitive and regulated Open Banking
marketplace. The question that often raises is…
: : How well do organisations really understand their customers? : :
// A Slow Start //
It is widely acknowledged that the Open Banking revolution has got off to a relatively slow start; not all of the nine mandated banks were ready at the get go, and to date, there are c40 regulated providers signed up for the Open Banking marketplace.
Some commentators have observed that banks remain slightly ambivalent toward Open Banking, and the in-scope banks are seeking to do the bare minimum with respect to compliance; therefore, they are not seeking to exploit or facilitate an Open Banking marketplace.
We are still in the early days of Open Banking. If we consider the account switching scheme that was launched in 2013, the jury is still out, with many commentators observing that account switching is like playing musical chairs with the same old furniture.
: : Open Banking - placing the control of your data with you, for your benefit
Your data is your digital footprint. Leveraged securely and in the right way, it can (many argue) lead to enhanced consumer choice, customer service and product personalisation.
: : So why the relatively low opt-in engagement rate? : :
// The Privacy Paradox //
Let’s face it: We consumers are a complex bunch…
We want everything. Yes, that’s right; we are happy to benefit from better deals when it suits us, however we can become frustrated by cookie generated advertisements and the perceived invasion of our privacy. We are up in arms (and rightly so) when
we are victims of a data breach.
However, we happily provide running commentary about our lives, our friends and our families on social media for free—that's right, for FREE—so that online and social media giants can market personalised advertisements based upon the data we gave away for
FREE. It's okay; we like sharing our data.
Therefore, it is not surprising that data sharing dilemmas exist and that these have contributed to a slow opt-in rate for Open Banking.
Referencing a recent Open Banking Mori poll, participants cited the following opt-in considerations:
- Financial data disclosure and control
- Accountability; who do you call when there is a fraud associated with your account? Your bank, of course
- Stereotyping and profiling
- Relevant use cases that outline the benefits
- Trust and risk
Those willing to engage with Open Banking raised concerns and questions about the ease and clarity of the actual process. Other polls cite a lack of awareness of Open Banking as a reason for the slow opt-in engagement rate. There are a multitude of reasons,
and there is possibly a simple solution…
// Data and Human Insight //
Open Banking and its use cases fail to really speak to the human, the human who is complex in thought and action, the human who wants a relationship that is based upon trust, value and understanding. The human who is single-minded but also wants to be led.
What is missing is human insight that is derived from active listening and combining complementary inputs and insights (e.g. human insights, market/customer insights, etc.), which can lead to findings that are valuable and actionable for all parties.
: : Data is truly valuable when the insights it brings mean something to human beings and can be acted upon and measured : :
There is an argument within some quarters that we are not ready for Open Banking because we do not understand the value and use of data and its relationship with human insight well enough to derive meaningful outcomes.
: : Is this a view shared by you? : :
// Next Generation: Open Banking //
This time last year, I published an article referencing business anthropology (Business anthropology anyone?). In that article, I argued
that human insight derived from business anthropology can engender a richer understanding of the experiences of customers, colleagues and partners with respect to their interactions with services, products and / or systems.
Open Banking should equate to the meeting of human needs, based upon human insights, trust and personalised value. This should allow all parties within the Open Banking relationship (i.e., customers, banks and authorised third-party providers) to fully understand
the un-met and under-realised needs of the customer and address the subject of the un-banked, a subject of a previous post of mine:
Open Banking - Financial Inclusion.
I welcome Open Banking and its possibilities. Over the coming years, I suspect that the concerns regarding trust, benefit and value, etc. will be addressed - the levels of indifference will be reduced, and consumer opt-in rates and the number of banking
cohorts will increase.
of course, some would say this is all in vain because we will all be banking with Amazon, and traditional banks will be no more than data repositories…
It would be great to obtain your views, please feel free to comment, like and share